CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP
CONFIDENTIAL — ATTORNEY WORK PRODUCT ATTORNEY-CLIENT PRIVILEGED COMMUNICATION
MEMORANDUM
TO: Renata Vasquez, Partner
FROM: Devon Archer, Senior Associate, and Nadia Petrov, Associate
DATE: July 10, 2023
RE: Analysis of Plaintiffs' Reply Brief on Class Certification (Filed July 7, 2023)
Matter No.: 1017-00004
Case: Fuentes, Halloran, and Padilla v. Aurelius Media Americas Inc., Lead Case No. 22STCV38214 (Consolidated), Superior Court of the State of California, County of Los Angeles — Central District, Assigned to Hon. Raymond Escobedo, Dept. 34
Hearing Date: July 28, 2023, 8:30 a.m.
I. Purpose and Summary
This memorandum provides our analysis of Plaintiffs' Reply Brief in Support of Their Motion for Class Certification, which was filed on July 7, 2023, by Castellano Byrne & Salas LLP (Marco Castellano, Diane Salas, and Trevor Kim) and Veltrano Employment Law Group PC (Sandra Higuera) on behalf of the three named plaintiffs. The Reply Brief is the final substantive filing before the scheduled hearing on July 28, 2023. This memorandum is intended to inform our hearing preparation strategy and to update our assessment of the likely certification outcome.
Plaintiffs' Reply responds to Aurelius Media Americas Inc.'s ("AMA") Opposition to the Motion for Class Certification, which we filed on June 16, 2023. Our Opposition was supported by the declarations of Lorraine Okafor, Senior Vice President of Human Resources; Celine Arroyo, Director of Production Operations; Karen Fong, Payroll Manager; Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC, retained as AMA's industrial/organizational psychology expert; and Dr. Catherine Lindstrom of Hargrove Analytics Inc., retained as AMA's economics and damages expert. Our Opposition argued that the wide variation in working conditions across AMA's fourteen show units and seven California production facilities, combined with the availability of the "Missed Meal Attestation" feature in AMA's NovaPay Solutions "TimeTrack Pro" timekeeping system at four of seven facilities, defeated commonality and predominance under California Rules of Court, rule 3.764, and the governing authorities.
The Reply Brief is twenty-eight pages in length (exclusive of exhibits) and advances four principal arguments:
(A) The TimeTrack Pro auto-deduction is a unifying "common denominator" that renders facility-level and show-unit-level variation irrelevant to the certification analysis;
(B) Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 supports class treatment where, as here, a uniform employer policy or practice is challenged, and AMA improperly conflates liability and damages inquiries;
(C) Dr. Makhija's analysis is either irrelevant to the certification inquiry or methodologically flawed due to selection bias and presentational cherry-picking; and
(D) Dr. Rennick's damages model, as set forth in his April 28, 2023 expert report from Pinnacle Economic Consulting Group LLC, provides a viable common methodology that satisfies Granite Harbor Partners LLC v. Behrend (2013) 569 U.S. 27 at the certification stage.
Having reviewed the Reply Brief in detail, along with the exhibits and supplemental declarations filed in support, we provide the following updated probability assessment:
•  55–60% probability of certification on the first meal period auto-deduction claim. This represents an increase from our pre-Reply assessment of approximately 50%, reflecting the effectiveness of Plaintiffs' reframing of the attestation feature issue, discussed in detail below.
•  25–30% probability of certification on rest period, off-the-clock, and derivative claims. This assessment is unchanged from our pre-Reply analysis.
•  Most likely outcome: Partial certification. We continue to believe the most probable result is that the Court will certify a class on the first meal period auto-deduction claim (and the derivative wage statement and UCL claims that track the meal period theory), while denying certification on the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims as too individualized for class treatment. The PAGA representative action will proceed alongside the certified class regardless of the certification ruling.
The balance of this memorandum provides a detailed section-by-section analysis of Plaintiffs' Reply arguments, an assessment of other notable arguments raised in the Reply, an updated probability matrix, implications for hearing preparation, and a discussion of settlement strategy in light of the updated certification outlook.
II. Analysis of Plaintiffs' Reply Arguments
A. Auto-Deduction as the "Common Denominator"
1. Plaintiffs' Argument
The central thrust of Plaintiffs' Reply is that AMA's Opposition constitutes an elaborate "distraction" from what Plaintiffs characterize as the single, dispositive common question: whether AMA's uniform application of the NovaPay Solutions "TimeTrack Pro" auto-deduction system across all seven California production facilities violates California meal period law on a class-wide basis. Plaintiffs devote the first nine pages of their Reply to this argument, and it is the strongest portion of their brief.
Plaintiffs describe the auto-deduction system as follows: TimeTrack Pro was configured to automatically deduct thirty minutes from every non-exempt employee's recorded time for any shift of six hours or more, regardless of whether the employee actually received a compliant, uninterrupted, off-duty meal period. Plaintiffs note — and our own records confirm — that the six-hour threshold was itself non-compliant: IWC Wage Order 12, which governs the motion picture industry, requires that an employer provide a meal period of not less than thirty minutes for any work period of more than five hours. AMA's system was not corrected to reflect the five-hour threshold until December 2022, after the filing of this action.
Plaintiffs contend that the auto-deduction system did not include an adequate mechanism for employees to report missed or shortened meal periods, and that this deficiency is the core common question binding the class together. In our Opposition, we emphasized that the TimeTrack Pro system included a "Missed Meal Attestation" feature that allowed employees to affirmatively report when they did not receive a compliant meal period, and that this feature was activated at four of the seven California facilities. We argued that this distinction between the two groups of facilities defeated commonality because it required an individualized inquiry into each facility's practices.
Plaintiffs' Reply directly confronts this argument and reframes it in a manner that we must candidly acknowledge is effective. Rather than conceding that the attestation feature creates meaningful facility-level variation, Plaintiffs argue that the feature's inconsistent implementation strengthens their case for certification, for the following reasons:
First, at three facilities — Studio City (Facility 2), Burbank (Facility 4), and El Segundo (Facility 7) — the Missed Meal Attestation feature was never activated during the class period. At these facilities, Plaintiffs argue, "AMA provided no mechanism at all for employees to report missed meals." The auto-deduction operated without any check, safeguard, or corrective process.
Second, at the four facilities where the feature was activated — West Hollywood Headquarters (Facility 1), Sherman Oaks (Facility 3), Hollywood (Facility 5), and Santa Monica (Facility 6) — the utilization rates were, according to Plaintiffs, so low as to render the feature functionally meaningless. Plaintiffs cite the following utilization rates from the TimeTrack Pro data: West Hollywood HQ, 2.3%; Sherman Oaks, 4.1%; Hollywood, 1.8%; Santa Monica, 3.7%.
Third, Plaintiffs argue that the low utilization rates at the "active" facilities demonstrate that employees were "either unaware of the feature or discouraged from using it." Plaintiffs cite the deposition testimony of Lorraine Okafor, AMA's SVP of Human Resources, taken on May 4, 2023, in which Ms. Okafor confirmed that AMA did not create or distribute any formal training materials specifically instructing employees on the existence or use of the Missed Meal Attestation feature.
Plaintiffs conclude this section with a passage that is likely to resonate with the Court:
"Either way, the auto-deduction operated identically across all facilities. A mechanism that employees do not know about is functionally equivalent to no mechanism at all. Whether the attestation feature was absent or merely invisible to the workforce, the result was the same: the auto-deduction stripped employees of their meal period premium pay without any reliable means of correction."
2. Our Assessment
This is an effective and well-constructed reframing of the evidence. By characterizing the Missed Meal Attestation feature as universally inadequate — whether because it was never activated or because it was activated but never effectively communicated to employees — Plaintiffs collapse the distinction between the two groups of facilities that was the centerpiece of our commonality argument.
The Court may well find this persuasive. The low utilization rates at the four "active" facilities are striking: all four fall below 5%. While we can and should argue that low utilization is consistent with employees actually receiving compliant meal periods (and thus having no reason to use the feature), the absence of any formal training materials regarding the feature significantly undermines this inference. The Okafor deposition testimony on this point is a meaningful concession. If employees did not know the feature existed, the mere fact that it was technically available in the TimeTrack Pro system cannot be treated as meaningful evidence that AMA provided an adequate mechanism for reporting missed meals.
Our Opposition emphasized that the attestation feature was available at four of seven facilities as evidence that AMA provided a reporting mechanism and that the employee experience differed across facilities. Plaintiffs' response — that a mechanism unknown to employees is no mechanism at all — is rhetorically strong and factually supported by the record. We do not have countervailing evidence (e.g., training logs, email communications, or employee acknowledgments) demonstrating that employees at the four "active" facilities were informed of the feature's availability.
Additionally, the six-hour versus five-hour threshold discrepancy adds another systemic element to Plaintiffs' common-question narrative. The fact that AMA's TimeTrack Pro system was configured to trigger the auto-deduction at six hours rather than the five-hour threshold required by IWC Wage Order 12 — and was not corrected until December 2022 — provides evidence of a system-wide error that is provable through common evidence. This threshold issue affects all employees who worked shifts between five and six hours during the pre-correction period, regardless of their facility, show unit, or individual working conditions.
Risk level: High. This argument is likely to resonate with the Court and has significantly strengthened Plaintiffs' position on the commonality and predominance requirements. It is the single most effective argument in the Reply Brief.
B. *Brinker* Does Not Require Individualized Proof
1. Plaintiffs' Argument
Plaintiffs devote approximately six pages of the Reply to their argument that Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 supports class treatment of the auto-deduction claim, notwithstanding the factual variation across AMA's facilities and show units. This section responds to our Opposition's argument that the Brinker framework — under which the employer's obligation is to "provide" a compliant meal period, not to "ensure" the employee actually takes one — necessarily requires an individualized inquiry into each employee's experience.
Plaintiffs' argument proceeds in three steps.
First, Plaintiffs cite Brinker for the established proposition that whether an employer "provided" compliant meal periods can be resolved on a class-wide basis where the employer's policy or practice operated uniformly. Plaintiffs argue that the Brinker court endorsed class certification in precisely these circumstances: where the employer maintained a company-wide policy or practice that could be evaluated through common evidence, even if the practical experience of individual employees varied. (53 Cal.4th at 1033.) Plaintiffs contend that AMA's TimeTrack Pro auto-deduction system constitutes exactly such a uniform policy or practice.
Second, Plaintiffs distinguish AMA's variability argument by drawing a line between the policy (auto-deduction without adequate safeguards) and the implementation (varying working conditions across fourteen show units and seven facilities). Plaintiffs argue that AMA is improperly conflating the liability question (was the auto-deduction policy lawful?) with the damages question (how much is each employee owed?). Under California law, the existence of individualized damages questions does not defeat class certification if common questions predominate on liability. Plaintiffs cite Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 333–334, for the principle that "[t]he fact that individual issues may arise in the course of trying common questions does not preclude a class action."
Third, Plaintiffs invoke Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, in which the California Supreme Court addressed the legality of employer rounding practices in the meal period context. While acknowledging that Donohue involved rounding rather than auto-deduction, Plaintiffs analogize that employer timekeeping practices that systematically favor the employer are presumptively unlawful and amenable to class treatment. Plaintiffs argue that Donohue's reasoning — that neutral-sounding timekeeping practices may mask systematic underpayment — applies with equal force to AMA's auto-deduction system.
2. Our Assessment
Plaintiffs' reading of Brinker is fair and will likely be accepted by the Court as a reasonable application of the governing authority. The Brinker court did endorse class certification where the employer maintained a "uniform policy" that could be evaluated on a class-wide basis, and Plaintiffs have marshaled a credible argument that the auto-deduction system qualifies as such a policy.
The critical question for the Court is whether AMA's auto-deduction constitutes a "uniform policy" (i.e., a substantive decision about how to handle meal period compliance and premium pay) or merely a "uniform system" (i.e., a neutral timekeeping tool that records time in a particular way). This is a distinction that the Court may or may not draw, and the outcome of the certification motion may turn on how the Court characterizes the auto-deduction.
Our position remains that the auto-deduction is a timekeeping method — a recording tool — and not a substantive policy regarding meal period provision. The substantive question under Brinker is whether each employee was "provided" a compliant meal period, which requires examining whether the employer made the meal period available and whether the employee was relieved of all duties for a continuous thirty-minute period. That inquiry is inherently individualized because it depends on the circumstances of each employee's shift, including the demands of their particular show unit, the practices of their immediate supervisor, and the operational exigencies of their facility.
However, Plaintiffs' counter-argument — that the absence of effective safeguards (the attestation feature) transforms the auto-deduction from a neutral recording tool into a de facto policy of denying meal period premiums — is persuasive and will be difficult to overcome. The argument runs as follows: if the auto-deduction automatically deducted thirty minutes without any reliable mechanism for employees to contest the deduction, then the system functioned as a policy of presuming compliance and denying premium pay. Under this framing, the auto-deduction is not merely a recording tool; it is the operative mechanism by which AMA avoided paying meal period premiums, and it operated identically across all facilities.
The Donohue analogy is imperfect because rounding and auto-deduction are different timekeeping practices. Rounding involves adjusting recorded time to the nearest increment (e.g., rounding to the nearest quarter-hour), while auto-deduction involves subtracting a fixed amount of time regardless of actual events. However, the underlying principle of Donohue — that employer timekeeping practices which systematically advantage the employer at employees' expense are suspect under California law — supports Plaintiffs' broader narrative. The Court may accept the analogy at the level of principle even if it does not accept a strict doctrinal parallel.
The Sav-On citation is well-taken. California courts have consistently held that the predominance requirement does not demand the absence of all individualized issues, but only that common questions "predominate" over individual ones. Plaintiffs need not demonstrate that every issue can be resolved on a class-wide basis; they need only show that the common questions are sufficiently central to the case that class treatment is superior to individual adjudication. At the certification stage, this is a relatively forgiving standard.
Risk level: Moderate-High. The Court is likely to accept that the auto-deduction itself presents a common question at the liability stage, particularly in combination with Plaintiffs' attestation feature argument discussed above. Our best argument in response is the system-versus-policy distinction, but we should be prepared for the possibility that the Court will not draw this distinction in our favor.
C. Attack on Dr. Makhija
1. Plaintiffs' Argument
Plaintiffs devote approximately five pages of the Reply to a targeted attack on the expert analysis of Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC. The attack proceeds along three lines.
Relevance. Plaintiffs argue that Dr. Makhija's analysis is "irrelevant" to the certification inquiry because it addresses working conditions — variation across fourteen show units and seven facilities in scheduling practices, shift lengths, supervisory structures, and operational demands — rather than employer policy. Plaintiffs contend that the variability Dr. Makhija documented is immaterial to the common question of whether AMA's auto-deduction policy was lawful. As Plaintiffs frame it: "AMA cannot escape class treatment by pointing to variations in the work environment when the challenged practice — the auto-deduction — is identical across all environments." In other words, the fact that a field-based reality show like "Summit Challenge" operates differently from a studio-based cooking competition like "Kitchen Clash" does not bear on whether the auto-deduction system applied to both was lawful.
Methodological flaws. Plaintiffs argue that Dr. Makhija's analysis is affected by selection bias because a significant component of his opinion relies on surveys and interviews conducted with supervisors — specifically, Unit Production Managers and Line Producers — rather than with the non-exempt employees whose meal period experiences are at issue. Plaintiffs argue that "supervisors have every incentive to report that their employees received compliant breaks; employees are the ones who know whether they actually did." This critique is directed at the portions of Dr. Makhija's report that discuss the informal practices and norms surrounding meal periods at each show unit, which Dr. Makhija used to illustrate the variability of the working environment.
Statistical cherry-picking. Plaintiffs note that Dr. Makhija's report highlighted certain data points while downplaying others. Specifically, Plaintiffs argue that Dr. Makhija emphasized the lowest missed-meal attestation rates — such as the 2.1% rate for the studio-based show "Kitchen Clash" — while giving less prominence to the highest rates, such as the 18.7% rate for the field-based show "Summit Challenge." Plaintiffs argue that even under Dr. Makhija's own data, the variation across show units supports rather than defeats the common question, because the auto-deduction system was applied to all employees regardless of their show unit's underlying violation rate. Whether the actual violation rate was 2.1% or 18.7%, the auto-deduction system treated all employees identically by deducting thirty minutes and providing no effective mechanism for correction.
2. Our Assessment
The relevance critique has some force in the context of the specific auto-deduction claim. If the Court accepts Plaintiffs' framing — that the common question is whether the auto-deduction policy is lawful — then evidence about the variability of working conditions is indeed tangential. Dr. Makhija's analysis demonstrates that the actual experience of receiving (or not receiving) a compliant meal period varies significantly by show unit, facility type, and production schedule, but Plaintiffs' argument is that the policy itself — not the experience under the policy — is what must be evaluated at the class-wide level. This is a coherent legal argument, even if we disagree with it.
However, Dr. Makhija's variability evidence remains relevant to the question of whether AMA "provided" compliant meal periods. Under Brinker, the inquiry is not merely whether the employer had a policy, but whether the employer in practice provided employees the opportunity to take a compliant break. If the Court considers the "provision" question at the certification stage — which it may or may not do — then Dr. Makhija's evidence that working conditions varied dramatically across show units bears directly on whether the provision question can be resolved on a class-wide basis.
The methodological critique regarding the survey of supervisors rather than employees is legitimate and creates a potential bias concern that the Court may credit. In employment class actions, courts are generally skeptical of expert analyses that rely primarily on management-side data to characterize employee experiences. However, Dr. Makhija's analysis does not depend solely on the supervisor surveys. His report also relies on objective, verifiable data drawn from the TimeTrack Pro system itself, including shift length distributions, overtime frequency data, facility type classifications, and production schedule records. These data sources are not subject to the same selection bias critique. At oral argument, we should be prepared to emphasize the objective data components of Dr. Makhija's analysis while acknowledging that the supervisor survey component is supplementary rather than foundational.
The "cherry-picking" point is more presentational than substantive. Dr. Makhija's report did, in fact, report the full range of missed-meal attestation rates across show units, including the 18.7% rate for Summit Challenge. The variation itself — a range from 2.1% to 18.7% — was the point of his analysis: to demonstrate that the employee experience was not uniform across show units and facilities. Plaintiffs' characterization of this as "cherry-picking" is somewhat misleading, but the rhetorical force of the argument is that even a wide range of violation rates does not change the fact that the auto-deduction system operated identically across all show units.
Risk level: Moderate. The Court may give Dr. Makhija's analysis reduced weight on the auto-deduction common question, particularly if the Court accepts Plaintiffs' framing that the relevant inquiry is the uniformity of the policy rather than the variability of working conditions. However, Dr. Makhija's analysis will likely remain relevant and persuasive with respect to the non-certified claims (rest period, off-the-clock), where Plaintiffs have not identified any analogous systemic mechanism and must rely on individualized evidence.
D. Defense of Dr. Rennick's Damages Model
1. Plaintiffs' Argument
Plaintiffs devote the final substantive section of their Reply (approximately five pages) to defending the damages model of their economics expert, Dr. Rennick of Pinnacle Economic Consulting Group LLC. Dr. Rennick's report, dated April 28, 2023, estimated aggregate damages of $38.6 million, inclusive of $12.2 million in PAGA penalties. Our economics expert, Dr. Catherine Lindstrom of Hargrove Analytics Inc., submitted a rebuttal report on June 9, 2023, criticizing Dr. Rennick's methodology and estimating an alternative aggregate damages figure of $5.8 million.
Plaintiffs make four arguments in defense of Dr. Rennick's model.
First, Plaintiffs argue that Dr. Rennick's model constitutes a permissible "common methodology" capable of measuring class-wide damages using common proof. The model relies on TimeTrack Pro data showing auto-deductions applied to every non-exempt employee's shifts, and calculates damages by treating each auto-deduction as a potential violation and applying the statutory meal period premium (one hour of pay at the employee's regular rate) to each instance where the employee did not submit a Missed Meal Attestation. Plaintiffs contend this approach is capable of measuring damages "across the entire class" using common data.
Second, Plaintiffs cite Granite Harbor Partners LLC v. Behrend (2013) 569 U.S. 27 for the proposition that a damages model need not be "perfect" at the certification stage. Plaintiffs argue that Northgate Enterprises requires only that the model be "capable of measurement across the entire class," and that Dr. Rennick's model satisfies this standard because it relies on class-wide data (the TimeTrack Pro records) and applies a uniform methodology to all class members.
Third, Plaintiffs argue that Dr. Lindstrom's critique — which challenged the foundation of Dr. Rennick's assumption that every auto-deducted meal period constituted a violation — goes to the weight of the damages evidence at trial, not to the admissibility of the model or the propriety of class certification. Plaintiffs contend that the disagreement between Dr. Rennick and Dr. Lindstrom is precisely the type of "battle of the experts" that should be resolved at trial, not at the certification stage.
Fourth, Plaintiffs acknowledge the foundational assumption in Dr. Rennick's model — that every auto-deducted meal period was "missed" unless a Missed Meal Attestation record affirmatively shows otherwise — and argue that this assumption is justified on two grounds: (a) under Brinker, AMA bears the burden of proving that it "provided" compliant meal periods, so the absence of evidence of compliance should be construed against AMA, not against the employees; and (b) the absence of an attestation record does not prove the employee took a compliant break — it may equally prove that the employee was unaware of the attestation feature or deterred from using it, consistent with the evidence regarding the feature's limited deployment and low utilization.
2. Our Assessment
The Northgate Enterprises citation requires careful analysis. Plaintiffs invoke Northgate Enterprises for the proposition that a damages model need not be perfect at the certification stage, but Northgate Enterprises actually held the opposite of what Plaintiffs suggest: the Supreme Court ruled that a damages model that does not match the plaintiff's theory of liability cannot support certification. (569 U.S. at 35.) The Northgate Enterprises majority held that certification was improper because the damages model attributed damages to four separate theories of antitrust injury, only one of which had survived class certification, and the model could not isolate the damages attributable to the certified theory alone.
However, the practical significance of Northgate Enterprises in California state court is limited. Northgate Enterprises was a 5-4 decision rendered in the federal antitrust context, and California courts have generally been more liberal than federal courts in their treatment of damages methodology at the certification stage. The California Supreme Court has not adopted Northgate Enterprises's more rigorous approach, and the Courts of Appeal have generally treated damages methodology disputes as going to the merits rather than to the propriety of class treatment. See, e.g., Brinker, 53 Cal.4th at 1054 (noting that "individual damage computations" do not "destroy" a class action).
The key vulnerability in Dr. Rennick's model remains the foundational assumption that every auto-deducted meal period constitutes a violation. This assumption converts the auto-deduction — which, on our theory, is a neutral recording method — into proof of a violation. Under Dr. Rennick's model, the only way for an employee to be excluded from the violation count is if the employee submitted a Missed Meal Attestation, which, as discussed above, was available at only four of seven facilities and was used at extremely low rates even at those facilities. The practical effect is a near-100% violation rate, which is implausible on its face and inconsistent with Dr. Makhija's variability data and the objective evidence in the record.
Our evidentiary objections to Dr. Rennick's report, filed on June 16, 2023, challenge this assumption under California Evidence Code sections 801 and 802 and Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747. Under Sargon, the trial court serves as a gatekeeper and must exclude expert opinion that is based on speculative or conjectural assumptions that have no reasonable basis in the evidence. We argued that Dr. Rennick's 100% violation-rate assumption is precisely such a speculative assumption.
However, Plaintiffs' reframing — that the burden of proving compliance rests on AMA under Brinker, and that the absence of attestation records is ambiguous rather than exculpatory — is a fair litigation argument that may carry weight at the certification stage. The Court is not required to resolve the merits dispute between Dr. Rennick and Dr. Lindstrom at certification; the Court need only determine whether a viable common methodology exists that could, in principle, measure class-wide damages. If the Court accepts Plaintiffs' burden-shifting argument, it may conclude that Dr. Rennick's model provides a plausible framework for class-wide damages calculation, even if the underlying assumption is contested.
As a practical matter, the LASC is unlikely to deny certification solely on the basis of a disputed damages model. California courts have consistently held that the propriety of class treatment should not be defeated by the existence of damages methodology disputes, which are properly resolved at trial or at a later stage of the proceedings. Judge Escobedo, based on our review of his prior rulings in wage-and-hour class actions, has followed this approach.
Risk level: Low-Moderate. Dr. Rennick's model is unlikely to be excluded at the certification stage, even though it has significant methodological flaws that we will exploit at trial if the case proceeds. The damages dispute is a trial issue, not a certification issue, and we should not expect the Court to resolve it in our favor on July 28.
III. Other Notable Arguments in Plaintiffs' Reply
A. Typicality and Adequacy
Plaintiffs' Reply devotes approximately two pages to reinforcing the typicality and adequacy of the three named plaintiffs. Plaintiffs argue that all three named plaintiffs are typical class representatives because each was subject to the same TimeTrack Pro auto-deduction system, each alleges missed meal periods during the class period, and each alleges off-the-clock work.
The three named plaintiffs are:
Marisol Fuentes — Production Coordinator, Unscripted Programming Division. Employed at Studio City (Facility 2) from March 14, 2019 through August 5, 2022. Facility 2 is one of the three facilities where the Missed Meal Attestation feature was never activated.
Derek Halloran — Post-Production Assistant, Digital Content Division. Employed at Hollywood (Facility 5) from June 1, 2020 through November 30, 2022. Facility 5 is one of the four facilities where the attestation feature was activated; however, Mr. Halloran testified at his deposition that he "never used it because nobody else did and I didn't want to cause problems."
Yesenia Padilla — Segment Coordinator, Live Events Division. Employed at Burbank (Facility 4) from January 10, 2018 through May 17, 2022. Facility 4 is one of the three facilities where the attestation feature was never activated.
Plaintiffs dismiss AMA's facility-variation argument as irrelevant to the typicality inquiry, arguing: "The question is not whether every named plaintiff had the identical experience, but whether their claims arise from the same course of conduct — AMA's auto-deduction policy." Plaintiffs contend that all three named plaintiffs were subject to the same challenged practice and allege the same categories of harm, which is sufficient to satisfy the typicality requirement.
Plaintiffs further note that the composition of the named plaintiff group is well-suited to the class: Fuentes and Padilla worked at facilities where the attestation feature was not activated (Facilities 2 and 4, respectively), making them particularly typical of employees at those facilities. Halloran worked at a facility where the feature was activated (Facility 5) but testified that he was deterred from using it, making him representative of the broader population of employees at "active" facilities who did not use the feature — a population that comprises the vast majority of employees at those facilities, given the sub-5% utilization rates.
Our Assessment: Plaintiffs' typicality argument is adequate for certification purposes. Under California law, the typicality requirement is satisfied when the named plaintiffs' claims are "reasonably co-extensive with those of absent class members," and the named plaintiffs are not subject to unique defenses that would divert significant attention from the common issues. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The Court is unlikely to deny certification on typicality grounds. Our best typicality argument — that Halloran's subjective decision not to use the attestation feature is not typical of the broader employee experience — is relatively weak, as Plaintiffs can counter that the low utilization rates demonstrate that Halloran's experience was, in fact, representative.
The adequacy requirement is similarly satisfied. There is no evidence of conflicts of interest among the named plaintiffs or between the named plaintiffs and the putative class. Plaintiffs' counsel — Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC — are experienced class action firms with track records in wage-and-hour litigation. We do not believe the adequacy requirement is a viable basis for opposing certification.
B. Superiority
Plaintiffs argue that a class action is the only practical mechanism for resolving the claims of the approximately 1,850 putative class members, most of whom would have individual claims too small to justify separate litigation. Plaintiffs cite the estimated average individual payment under the Net Settlement Fund calculation of approximately $4,460, and the estimated average underpayment per class member of approximately $20,865 (under Plaintiffs' calculation) or approximately $3,135 (under AMA's calculation based on Dr. Lindstrom's analysis).
Plaintiffs note that AMA does not maintain class action or PAGA waiver arbitration agreements with its non-exempt employees. As a result, AMA cannot argue that individual arbitration is an available and superior alternative to class treatment. This eliminates one of the most common bases for opposing the superiority requirement in modern wage-and-hour litigation.
Our Assessment: This is a strong argument. The superiority requirement is routinely satisfied in wage-and-hour class actions involving large classes with relatively small individual claims, and the absence of arbitration agreements removes any alternative procedural mechanism. We do not believe the Court will deny certification on superiority grounds, and we do not recommend devoting significant hearing time to this issue.
C. SB 699 / AB 1076 Reference
Plaintiffs' Reply includes a brief footnote (footnote 14, at page 22) citing Senate Bill 699, effective January 1, 2024, codified as California Business and Professions Code section 16600.5. This statute, which addresses the enforceability of non-compete agreements, is not directly relevant to any of the class certification issues in this case. The reference appears in the context of a passing comment about AMA's "broader employment practices" and seems intended to imply that AMA has a pattern of aggressive or non-compliant employment practices.
Our Assessment: This reference is immaterial to the certification analysis. Non-compete law has no bearing on meal period, rest period, or wage-and-hour claims. The footnote appears to be a strategic choice by Plaintiffs' counsel — likely attributable to Sandra Higuera of Veltrano Employment Law Group, whose practice includes non-compete and trade secret litigation — to paint AMA as a bad actor before the Court. We do not recommend addressing this reference at the hearing, as doing so would only draw attention to it. If the Court raises it, we should note its irrelevance to the certification motion and move on.
IV. Updated Probability Assessment
Based on our analysis of Plaintiffs' Reply Brief, we provide the following updated probability assessment for each of the claims at issue in the certification motion:
Most likely outcome: Partial certification. We expect the Court to certify a class on the first meal period auto-deduction claim and the derivative claims that track the meal period theory (wage statement violations under Labor Code section 226 and UCL violations under Business and Professions Code section 17200). We expect the Court to deny certification on the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims as too individualized for class treatment. The PAGA representative action will proceed alongside the certified class regardless of the Court's ruling on class certification.
Basis for Increased Probability on the Meal Period Claim:
The increase from approximately 50% to 55–60% probability on the first meal period auto-deduction claim is attributable to four factors:
1.  Plaintiffs' reframing of the attestation feature issue is persuasive. By demonstrating that the attestation feature was either absent (at three facilities) or utilized at rates below 5% (at the remaining four facilities), Plaintiffs have effectively undermined AMA's argument that the feature's availability at four of seven facilities defeats commonality. The low utilization rates, combined with the absence of formal training materials, support the inference that the feature was functionally inadequate across all facilities. This collapses the facility-level distinction that was the strongest component of our commonality argument.
2.  The Brinker policy-versus-implementation distinction favors Plaintiffs when the challenged practice is truly uniform. The auto-deduction system was, indisputably, applied identically across all seven facilities. Whatever variation existed in working conditions, shift lengths, supervisory practices, and production schedules, the auto-deduction itself did not vary. Under Brinker, a uniform employer practice is amenable to class treatment at the liability stage.
3.  Judicial track record. The LASC, and Judge Escobedo in particular, has a track record of certifying meal period classes where a uniform timekeeping practice is challenged, even where implementation varies across locations or departments. Based on our review of Judge Escobedo's prior rulings in Chen v. Pacific Metro Logistics, Inc. (2019) and Reyes v. CalBridge Hospitality Group (2021), the Judge has been receptive to certification where the employer maintained a company-wide timekeeping system that was alleged to systematically deny meal period premiums.
4.  Effective neutralization of our strongest argument. Plaintiffs' Reply effectively neutralized what we considered our best argument against certification — the facility split between "active" and "inactive" attestation feature facilities — by collapsing the distinction between absent and underutilized features. This was the argument we expected to carry the most weight with the Court, and Plaintiffs' response has significantly diminished its force.
We emphasize that a 55–60% probability of certification is not a prediction that certification will be granted. It reflects our assessment that the arguments and evidence slightly favor Plaintiffs on this particular claim, but the outcome remains genuinely uncertain. The Court could reasonably deny certification even on the meal period claim if it accepts our characterization of the auto-deduction as a recording method rather than a substantive policy, or if it concludes that the Brinker "provision" inquiry is inherently individualized regardless of the uniformity of the timekeeping system.
V. Implications for Hearing Preparation
A. Points to Emphasize at July 28 Hearing
Based on our analysis of the Reply Brief and the updated probability assessment, we recommend the following approach for oral argument at the July 28 hearing:
1. Lead with the system-versus-policy distinction. Our strongest remaining argument is that the TimeTrack Pro auto-deduction is a timekeeping recording method, not a substantive policy of denying meal period breaks or meal period premiums. The auto-deduction records time in a particular way; it does not dictate whether, when, or how AMA provides meal periods to its employees. Under Brinker, liability turns on whether AMA "provided" compliant meal periods — i.e., whether AMA made meal periods available and relieved employees of all duties for the required thirty-minute period. That question is fact-intensive and employee-specific: it depends on the demands of each employee's shift, the instructions of each employee's supervisor, and the operational realities of each employee's show unit. The auto-deduction data alone cannot answer this question. By framing the argument this way, we direct the Court's attention away from the uniformity of the auto-deduction and toward the inherently individualized nature of the "provision" inquiry.
2. Concede the three-facility issue but argue for subclassing. If the Court appears inclined to certify on the auto-deduction claim, we should pivot to a narrowing strategy. We should concede that the three facilities where the attestation feature was never activated (Facilities 2, 4, and 7) present a stronger case for certification, and urge the Court to limit any certified class to a subclass of employees at those three facilities and/or to employees during the period before the attestation feature was corrected (pre-December 2022). This narrowing approach reduces the putative class from approximately 1,850 employees to approximately 700 employees at the three facilities, and demonstrates AMA's reasonableness to the Court. It also preserves our ability to argue on the merits that even at the three facilities, the provision question remains individualized.
3. Challenge the inference from low attestation rates. Plaintiffs' argument that low attestation utilization rates indicate employee unawareness or deterrence is an inference, not a fact. The inference is equally consistent with employees actually taking compliant breaks and having no reason to use the attestation feature. We should emphasize this alternative inference at oral argument and point to supporting evidence: the Okafor declaration confirms that only 14 formal complaints regarding meal period violations were filed by non-exempt employees during the entire class period. If a significant portion of the approximately 1,850 class members were actually experiencing meal period violations, we would expect a substantially higher volume of complaints — through formal channels, informal supervisory reports, or other mechanisms. The low complaint volume, combined with the low attestation usage, is more consistent with general compliance than with systemic violations. This is precisely the kind of inferential dispute that cannot be resolved on a class-wide basis without hearing from individual employees regarding their actual meal period experiences.
4. Rest period and off-the-clock claims must be denied. Even if the Court certifies the meal period claim, we should vigorously argue that the rest period and off-the-clock claims are not amenable to class treatment. The rest period claim lacks any systemic mechanism analogous to the auto-deduction: rest periods are not tracked in the TimeTrack Pro system, consistent with standard industry practice (rest periods are paid time, and employers in the motion picture industry do not typically require employees to clock in and out for ten-minute paid rest breaks). Without a timekeeping mechanism that can serve as common proof, Plaintiffs have no basis for proving rest period violations on a class-wide basis. Similarly, off-the-clock work is, by definition, unrecorded — there is no data source that captures the alleged off-the-clock work, and Plaintiffs' evidence consists of only three anecdotal declarations from employees in different divisions at different facilities. These declarations, while sufficient to state individual claims, are insufficient to establish commonality or predominance for a class of 1,850 employees.
5. Exclude PAGA from class treatment. PAGA claims are representative actions brought on behalf of the State of California under Labor Code sections 2698 through 2699.8. They do not require class certification, and the procedural requirements for PAGA actions differ from those for class actions. The Court should not conflate the two procedural mechanisms. We should urge the Court to address the class certification motion on its own terms and to treat the PAGA claim as a separate procedural vehicle that will proceed regardless of the certification ruling.
B. Anticipated Questions from the Court and Proposed Responses
Based on our review of Judge Escobedo's questioning patterns in prior certification hearings, we anticipate the following questions and recommend the following responses:
C. Preparation Steps Before Hearing
In light of the foregoing analysis, we recommend the following preparation steps in advance of the July 28 hearing:
1.  Lead counsel attendance. Renata Vasquez should attend the hearing and present oral argument, given the significance of the certification ruling to AMA's litigation posture and settlement strategy. Devon Archer will serve as second chair and will be prepared to address any factual or evidentiary questions that arise during argument.
2.  Argument outline. We will prepare a detailed argument outline with timing allocations. We anticipate approximately twenty minutes of total argument time (consistent with Judge Escobedo's practice in prior certification hearings in Department 34). The outline will allocate time as follows: approximately five minutes on the system-versus-policy distinction; approximately four minutes on the subclassing alternative; approximately four minutes on the attestation rate inference; approximately four minutes on rest period and off-the-clock claims; and approximately three minutes reserved for rebuttal and responses to Court questions.
3.  Exhibit binder. We will prepare a tabbed binder of key exhibits for potential Court questions, including: (a) TimeTrack Pro configuration records showing the auto-deduction settings and the six-hour threshold; (b) attestation usage rate data by facility, presented in tabular form; (c) Dr. Makhija's data tables showing shift length distributions and missed-meal rates by show unit, with the full range from 2.1% (Kitchen Clash) to 18.7% (Summit Challenge); (d) excerpts from the Okafor declaration regarding the 14 formal complaints filed during the class period; and (e) excerpts from the depositions of the three named plaintiffs regarding their individual meal period experiences.
4.  Mediation logistics. We should be prepared to discuss mediation logistics and timing if the Court raises the possibility of post-certification settlement discussions. We recommend having available dates for late August 2023 and the name and contact information for our proposed mediator, Hon. Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc.
VI. Implications for Settlement Strategy
The updated certification probability assessment has meaningful implications for AMA's settlement posture in this matter.
If certification is granted — even on a partial basis limited to the first meal period auto-deduction claim and derivative claims — the settlement dynamic shifts significantly in Plaintiffs' favor. A certified class of approximately 1,850 non-exempt employees (or approximately 700 employees if the Court adopts our subclass proposal) gives Plaintiffs substantially greater leverage than the three named plaintiffs and the PAGA representative claim alone. The certification of a class also triggers notice obligations, which will increase Plaintiffs' visibility among current and former AMA employees and may generate additional claimants or opt-ins.
Based on the updated probability assessment, we recommend updating our settlement range as follows:
Updated settlement range recommendation: $12–16 million (Gross Settlement Amount) for the class action component, reflecting the certified claims, the PAGA component, and AMA's continued strength on the non-certified claims. This range represents an increase from our prior recommendation of $8–12 million, which was premised on a lower probability of certification.
The PAGA component within this range is estimated at $750,000 to $1,000,000, consistent with our prior PAGA analysis memorandum dated April 3, 2023. Under PAGA, 75% of civil penalties are allocated to the Labor and Workforce Development Agency ("LWDA") and 25% to the aggrieved employees. We do not anticipate that the PAGA exposure will change significantly based on the certification ruling, as the PAGA claim proceeds as a representative action regardless of class certification.
Insurance coordination. AMA's Employment Practices Liability policy with Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837) provides coverage for employment-related claims, subject to a $5 million Self-Insured Retention ("SIR") and a $15 million aggregate limit. Given the updated settlement range of $12–16 million, AMA's exposure above the SIR could reach $7–11 million, with the carrier responsible for up to $11 million (subject to policy terms and any coverage disputes). We recommend that Bernard Crawford, AMA's coverage counsel, be engaged to update Pemberton on the following: (a) the updated probability assessment reflecting the increased likelihood of certification on the meal period claim; (b) the anticipated settlement range of $12–16 million; and (c) a request for confirmation of the carrier's willingness to participate in settlement discussions at the higher end of the anticipated range. This communication should be made promptly — preferably within the next week — so that Pemberton has adequate time to evaluate its position before any post-hearing mediation.
Mediation timing. We recommend that mediation be scheduled promptly after the certification order. Based on Judge Escobedo's typical turnaround time for post-hearing certification rulings, we anticipate a ruling by mid-August 2023. We should contact Hon. Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc. promptly to hold dates in late August or early September 2023. Early mediation — before class notice is sent — is strategically preferable because it avoids the costs and disruption of the notice process and allows AMA to resolve the matter before the class becomes more engaged and more difficult to settle with.
Parallel Aldrich matter. Separately, we should begin developing the settlement strategy for the Aldrich matter in parallel with this case. We understand that the Aldrich matter involves related employment claims against AMA arising from similar timekeeping practices, though in a different operational context. Our target settlement range for Aldrich is $1.5–3.0 million, and we recommend exploring the possibility of resolving both matters in conjunction at mediation. A global resolution would provide AMA with finality across both matters, reduce aggregate transaction costs, and may provide leverage in negotiating a more favorable allocation across the two cases.
VII. Conclusion and Recommendation
Plaintiffs' Reply Brief is well-crafted and effectively addresses the strongest arguments in our Opposition. Castellano Byrne & Salas and Veltrano Employment Law Group have produced a focused, persuasive brief that demonstrates a strong command of the record and the governing authorities.
The most significant development in the Reply is Plaintiffs' successful reframing of the attestation feature issue. Our Opposition relied heavily on the argument that the Missed Meal Attestation feature was available at four of seven facilities, creating facility-level variation that defeated commonality and predominance. Plaintiffs' Reply collapses this distinction by demonstrating that the feature was either absent or underutilized to the point of functional irrelevance at all seven facilities. This reframing is supported by objective utilization data (all rates below 5%) and by the Okafor deposition testimony confirming the absence of formal training materials. It is the single most effective argument in the Reply, and it has meaningfully shifted the certification calculus in Plaintiffs' favor.
We remain confident in our position on the non-auto-deduction claims (rest period, off-the-clock/overtime, second meal period, waiting time penalties), where Plaintiffs have not identified any analogous systemic mechanism and where the evidence remains fragmented and individualized. We also believe that Dr. Rennick's damages model has significant methodological flaws that will be exploitable at trial, even if the Court declines to address them at the certification stage.
We recommend the following course of action:
1.  Hearing preparation. Prepare for the July 28 hearing on the assumption that the Court is inclined toward partial certification on the first meal period auto-deduction claim and derivative claims. Focus oral argument on: (a) narrowing the scope of any certified class, including through the subclass proposal for Facilities 2, 4, and 7; (b) excluding the rest period, off-the-clock, and other non-auto-deduction claims from class treatment; and (c) positioning AMA for prompt, good-faith mediation following the certification ruling.
2.  No supplemental briefing. We do not recommend filing any revisions to our Opposition or supplemental briefing at this stage. The arguments are fully joined, the evidentiary record is complete, and the Court will rule based on the existing papers. Any supplemental filing at this point would risk appearing as a sign of weakness or desperation and would likely not be permitted under the Court's briefing schedule in any event.
3.  Settlement preparation. Engage Bernard Crawford to update Pemberton Mutual Assurance Co. on the revised probability assessment and settlement range. Contact Hon. Patricia Okoro (Ret.) at Westpark Dispute Resolution Inc. to hold mediation dates in late August 2023. Begin developing the Aldrich settlement strategy in parallel with the goal of a global resolution.
We are available to discuss this memorandum and the hearing preparation strategy at your convenience. We suggest scheduling a preparation session no later than July 20, 2023, to allow adequate time for argument rehearsal and exhibit preparation before the July 28 hearing.
This memorandum is a confidential attorney work product prepared in anticipation of litigation and is protected by the attorney-client privilege and the work product doctrine. It is intended solely for the use of the named recipient and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
Claim | Probability of Certification | Change from Pre-Reply Assessment
First Meal Period (Auto-Deduction) | 55–60% | Increased from ~50% (pre-Reply)
Second Meal Period | 15–20% | No change
Rest Period | 25–30% | No change
Off-the-Clock / Overtime | 20–25% | No change
Minimum Wage (derivative) | 20–25% | Tracks overtime claim
Wage Statement (Cal. Lab. Code § 226) (derivative) | 50–55% | Tracks meal period as derivative
UCL (Cal. Bus. & Prof. Code § 17200) (derivative) | 50–55% | Tracks meal period as derivative
Waiting Time Penalties | 15–20% | No change
PAGA (representative, not class) | N/A — proceeds regardless | N/A
Anticipated Question | Proposed Response
"Why shouldn't the auto-deduction itself be treated as a common policy?" | "Your Honor, because the auto-deduction is a recording method, not a substantive policy. It records time in a particular way — by deducting thirty minutes automatically. But it does not dictate whether employees receive compliant meal periods. The substantive question under Brinker is whether each employee was provided a compliant meal period — whether the employer made the break available and relieved the employee of duties. That requires individualized evidence of each employee's actual experience on each shift, which cannot be resolved through common proof."
"What about the three facilities without the attestation feature?" | "That is a closer question, Your Honor, and we acknowledge that. We have proposed a subclass approach for those three facilities, which we believe is the appropriate framework if the Court is inclined toward any certification. But even at those three facilities, employees had an alternative reporting mechanism: they could notify their supervisor of a missed meal period pursuant to AMA's written meal period policy. Whether each employee actually missed a break, and whether each employee had a reasonable opportunity to report a missed break through supervisory channels, remains individualized."
"Doesn't the low attestation usage rate suggest employees were deterred from reporting?" | "Not necessarily, Your Honor. The low usage rate is equally consistent with employees actually taking compliant breaks and having no reason to report. The Okafor declaration confirms that only 14 formal complaints regarding meal periods were filed during the entire class period — which suggests that employees who had genuine concerns did come forward through available channels. The low attestation rate more likely reflects that most employees had compliant meal periods and had no occasion to use the feature. Drawing the inference that employees were deterred requires exactly the kind of individualized inquiry into each employee's subjective experience that defeats class treatment."
"Are you willing to mediate?" | "Yes, Your Honor. AMA is prepared to participate in good-faith mediation with a neutral mediator promptly following the Court's certification order. We would propose the Honorable Patricia Okoro, Retired, of Westpark Dispute Resolution Inc., as mediator, and we are available to discuss scheduling and logistics with Plaintiffs' counsel."
"What about Plaintiffs' argument that the damages model dispute goes to weight, not admissibility?" | "Your Honor, at the certification stage, the Cou