CALDERWOOD & HARKNESS LLP
CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Engagement File — Matter No. 1017-00004
FROM: Nadia Petrov
DATE: January 10, 2023
RE: ESI Proportionality Analysis — Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214
I. Purpose
This memorandum analyzes the proportionality considerations governing the collection, processing, review, and production of electronically stored information ("ESI") in the putative class action captioned Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214. The analysis is prepared in anticipation of negotiating an ESI protocol with Plaintiffs' counsel — Castellano Byrne & Salas LLP ("Ridgeway Enterprises") and Veltrano Employment Law Group PC ("Veltrano") — and is intended to guide our firm's approach to the ESI stipulation expected to be finalized by mid-January 2023. Specifically, the ESI Protocol Stipulation is targeted for entry on or about January 13, 2023, following initial exchanges with opposing counsel on January 11 and 12, 2023.
This memorandum is prepared as part of the broader engagement in which Calderwood & Harkness LLP ("C&H") has been retained to defend Aurelius Media Americas Inc. ("AMA"), a Delaware corporation qualified to do business in California, against the claims asserted in Fuentes. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales and listed on the London Stock Exchange (ticker: AGMG). AMA's principal office is located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069.
AMA employs approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California across the company's various production facilities, post-production operations, and corporate functions. The Fuentes class action concerns the wage-and-hour treatment of approximately 1,850 putative class members — current and former non-exempt, hourly employees — during the class period running from November 1, 2018 through the present. AMA operates seven California production facilities and maintains 14 distinct show units operating under Industrial Welfare Commission ("IWC") Wage Order 12, which governs the motion picture industry and imposes industry-specific requirements regarding hours of work, meal periods, and rest breaks.
The proportionality analysis set forth below addresses each significant category of ESI relevant to this matter, provides volumetric estimates, assesses the cost of collection and production, and recommends a production approach for each data source. These recommendations are designed to fulfill AMA's discovery obligations while managing cost and burden in a manner consistent with the proportionality principles codified in Code of Civil Procedure section 2017.020 and the guidance of California appellate courts.
II. Scope of Relevant ESI
The ESI scope in this matter is driven by the claims asserted in Plaintiffs' Class Action Complaint and PAGA Notice, which encompass the following causes of action: meal-and-rest-break violations under California Labor Code sections 226.7, 510, 512, 1194, 1197, 1197.1, and 1198; unfair business practices claims under the Unfair Competition Law, California Business and Professions Code section 17200 et seq. (the "UCL"); and representative claims under the Private Attorneys General Act of 2004 ("PAGA"), California Labor Code sections 2698 through 2699.8. These overlapping claims create a broad but definable scope for ESI identification and collection.
The core factual disputes requiring ESI production center on four principal issues:
(1) Whether AMA's auto-deduction policy — which automatically deducted 30 minutes of unpaid meal-period time from shifts of six hours or longer — resulted in systematic underpayment for missed or shortened meal periods. The auto-deduction mechanism is embedded in AMA's timekeeping system (NovaPay TimeTrack Pro, discussed in detail below), and the critical question is whether employees who were denied a full, uninterrupted 30-minute meal period were nevertheless subjected to the auto-deduction without manual correction or premium pay.
(2) Whether production coordinators and post-production assistants — two of the primary job classifications at issue — were pressured by supervisors to work off-the-clock during pre-production setup and wrap periods. Plaintiffs allege that AMA's production schedules systematically required employees to begin work before their scheduled call times and to remain at work after wrap without compensation, a pattern that Plaintiffs contend was known to and condoned by AMA management.
(3) Whether AMA provided compliant second meal periods for shifts exceeding ten hours. Under California Labor Code section 512(a), an employer may not employ an employee for a work period of more than ten hours per day without providing a second meal period of not less than 30 minutes. Given the nature of motion picture production, shifts exceeding ten hours are common — and the call sheets and production records are expected to show that shifts of 12 to 16 hours occurred with regularity across AMA's show units.
(4) Whether rest breaks were provided every four hours or major fraction thereof, as required by California law and IWC Wage Order 12, section 12.
ESI bearing on these factual disputes is necessary for both merits analysis and class certification briefing. Plaintiffs' motion for class certification is anticipated to be filed on or about April 14, 2023. Consequently, a substantial portion of the ESI production — particularly the timekeeping data, payroll records, and representative email and messaging data — will need to be completed well in advance of that deadline to permit expert analysis and declaration preparation.
III. Data Universe — Identification and Volumetric Analysis
The following subsections describe each significant category of ESI identified in the course of our initial data-mapping assessment. The data-mapping process was conducted in coordination with AMA's in-house legal team (principally Gregory Tanaka, VP Legal & Compliance, and Karen Fong, Payroll Manager) and involved interviews of IT personnel, review of data system architecture documentation, and preliminary discussions with NovaPay Solutions Inc., AMA's third-party payroll processor and timekeeping system provider.
A. NovaPay Solutions TimeTrack Pro (Timekeeping Data)
The most critical data source in this matter is the electronic timekeeping data maintained by NovaPay Solutions Inc. ("NovaPay"), located at 2200 Powell Street, Suite 600, Emeryville, California 94608. The key custodian of data at NovaPay is Marcus Yee, Director of Client Data Services. NovaPay has served as AMA's payroll processor and electronic timekeeping system provider since January 1, 2019, when AMA transitioned from a manual paper-based timekeeping system to NovaPay's TimeTrack Pro platform.
TimeTrack Pro is an electronic punch-in/punch-out system that records employee clock-in and clock-out times at each of AMA's California production facilities. The system is deployed via fixed-location terminals at each facility as well as through a mobile application used by employees assigned to field-based show units. The system maintains a comprehensive database of punch records, including daily clock-in, clock-out, and meal-period punch events.
A key feature of AMA's TimeTrack Pro configuration is the meal break auto-deduction function, which automatically deducts 30 minutes of unpaid time from any shift of six hours or longer. This auto-deduction is applied system-wide across all California facilities. It is worth noting that the six-hour auto-deduction threshold may itself present a compliance concern: under IWC Wage Order 12, a meal period is required when an employee works more than five hours, not six. This discrepancy has been flagged as a separate compliance issue in Document 9 (Compliance Memorandum) and will likely be a focus of Plaintiffs' certification arguments regarding common questions of law and fact.
TimeTrack Pro also includes a "Missed Meal Attestation" feature, which allows employees to report missed or shortened meal periods through the system interface. When an employee submits a Missed Meal Attestation, the system flags the relevant shift for payroll review and, depending on AMA's facility-level configuration, may trigger automatic payment of a meal period premium. The historical activation and deactivation records for this attestation feature — which vary by facility — are among the data elements we anticipate requesting from NovaPay.
The estimated volume of timekeeping data is approximately 12 million punch records across all California facilities for the full class period (November 1, 2018 through the present). This figure encompasses all punch events for all non-exempt employees, including clock-in, clock-out, meal-period start, meal-period end, and attestation records. Pre-January 1, 2019 timekeeping data was maintained in a different format (paper timesheets), which is discussed separately in Section III.G below.
All timekeeping data is stored on NovaPay's servers in Emeryville, California. Because this data is held by a third party, it will need to be obtained via a third-party subpoena duces tecum directed to NovaPay. The subpoena is currently in preparation, and we are coordinating with both AMA's in-house team and NovaPay's data services contact to ensure that the subpoena captures the appropriate scope and format specifications.
The relevance of this data set cannot be overstated. The NovaPay timekeeping data is the central data set in the case — it represents the most relevant evidence for both class certification and merits analysis. The punch records capture the actual clock-in and clock-out times for each employee, the application of the auto-deduction feature, and any Missed Meal Attestation records submitted by employees. Analysis of this data will enable both sides' experts to determine the frequency and scope of auto-deductions, the incidence of missed or shortened meal periods, the extent to which second meal periods were or were not provided on shifts exceeding ten hours, and the pattern of rest break scheduling across facilities and show units.
B. AMA Email (Exchange/Ashbury Software)
AMA's corporate email is hosted on Strathmore Data Systems/Ashbury Software within Ashbury Holdings's cloud infrastructure at a United States data center. Email is a significant data source because it captures internal communications regarding AMA's timekeeping practices, meal-and-rest-break policies, production scheduling decisions, and any management responses to employee complaints about wage-and-hour issues.
The estimated total email volume across the seven identified custodians is approximately 4.2 million emails, inclusive of all sent, received, calendar, and archived messages within the custodians' mailboxes and any associated archive or journal files. The seven custodians were identified in the course of the litigation hold process (consistent with the litigation hold notice issued on November 2, 2022) and represent the key individuals with knowledge of AMA's timekeeping, payroll, HR, production, and compliance functions. The custodians are:
1. Lorraine Okafor, SVP Human Resources — As the most senior HR executive at AMA, Ms. Okafor has knowledge of AMA's wage-and-hour policies, employee classifications, and any internal investigations or complaints regarding meal-and-rest-break practices. Her mailbox is among the largest, estimated at approximately 950,000 emails.
2. Gregory Tanaka, VP Legal & Compliance — Mr. Tanaka serves as AMA's primary in-house legal contact for this matter and has knowledge of AMA's compliance efforts, internal policy reviews, and communications with outside counsel regarding wage-and-hour obligations. His mailbox is estimated at approximately 620,000 emails. A significant proportion of his communications will be subject to attorney-client privilege.
3. Marcus Yee, Director of Client Data Services (NovaPay Solutions) — Mr. Yee is a third-party custodian employed by NovaPay. His communications with AMA personnel regarding the configuration, operation, and troubleshooting of TimeTrack Pro are relevant to the auto-deduction and Missed Meal Attestation features. A separate subpoena will be required for his email. His estimated volume of AMA-related communications is comparatively modest — approximately 45,000 emails.
4. Jonathan Mercer, President — As the president of AMA, Mr. Mercer has knowledge of company-wide policies, strategic decisions regarding workforce management, and high-level communications regarding labor compliance. His estimated mailbox volume is approximately 800,000 emails.
5. Celine Arroyo, Director of Production Operations — Ms. Arroyo oversees day-to-day production operations at AMA's California facilities and has direct knowledge of production scheduling, shift lengths, and operational decisions that bear on meal-and-rest-break compliance. Her estimated mailbox volume is approximately 710,000 emails.
6. Dwayne Prescott, VP of Unscripted Programming — Mr. Prescott is primarily relevant to the anticipated Aldrich individual action (Case No. 22STCV41087), but he is also relevant to the class action insofar as he supervised production operations for several of AMA's unscripted programming show units. His estimated mailbox volume is approximately 580,000 emails.
7. Karen Fong, Payroll Manager — Ms. Fong manages AMA's payroll operations, coordinates with NovaPay on payroll processing, and has knowledge of premium pay calculations, wage statement preparation, and payroll error resolution. Her estimated mailbox volume is approximately 495,000 emails.
After application of keyword filtering and global de-duplication (using MD5 hash values), the estimated reviewable volume is expected to be approximately 150,000 documents, representing an estimated 1.2 million pages for production. This estimate is based on preliminary testing of representative search terms against a sample of custodian mailboxes, conducted in coordination with our e-discovery vendor, Marlowe Asset Management Litigation Technology Inc.
It should be noted that the anticipated Aldrich individual action (Case No. 22STCV41087) may expand the custodian list if additional supervisory personnel are implicated. However, for purposes of this proportionality analysis, the focus is on the seven custodians identified in the context of the Fuentes class action.
C. AMA HR System (Employee Records and Policies)
AMA maintains an internal Human Resources Information System ("HRIS") at its principal office in West Hollywood. The HRIS contains a broad range of employee records, including personnel files, employment agreements, offer letters, job descriptions, performance evaluations, disciplinary records, employee handbooks, policy manuals, and training materials. The HRIS also maintains records of HR complaints and grievances, including any complaints related to wage-and-hour issues, meal-and-rest-break policies, or off-the-clock work.
The total volume of employee files in the HRIS is approximately 3,200 (corresponding to AMA's full United States headcount). The subset relevant to the class action consists of the approximately 1,850 putative class member files — those belonging to current and former non-exempt, hourly employees who worked at AMA's California facilities during the class period.
The HRIS data is relevant to multiple aspects of the case, including employee classification determinations (which bear on the definition of the putative class), meal-and-rest-break policies (including the most recently revised employee handbook, dated March 2021), training materials related to wage-and-hour compliance (including any supervisor training on meal-and-rest-break obligations under Wage Order 12), and HR complaints and grievances reflecting employee reports of meal-and-rest-break violations or off-the-clock work.
The data in the HRIS exists in a mix of formats: structured database records (employee demographic and classification data) and unstructured documents (PDF and Word files for handbooks, policies, evaluations, and complaint records). The structured data can be exported in tabular format; the unstructured documents will require individual review for responsiveness and privilege.
D. Payroll Records (NovaPay)
Payroll records are maintained by NovaPay Solutions Inc. on the same server infrastructure as the timekeeping data described in Section III.A. The payroll data includes pay stubs, wage statements, gross wages, overtime wages, meal period premiums paid, rest period premiums paid, deductions, and withholdings for all AMA employees processed through the NovaPay system.
The estimated volume is approximately 156,000 pay stubs for the putative class members during the class period. This figure is derived from the approximately 1,850 putative class members multiplied by approximately 84 biweekly pay periods spanning the class period (approximately four years and two months, from November 1, 2018 through the present, assuming biweekly pay cycles). We note that the actual number may be somewhat lower due to employee turnover — not all 1,850 putative class members were employed for the entire class period — but 156,000 represents a reasonable upper-bound estimate.
Payroll records are relevant to several derivative claims in the complaint, including claims for inaccurate wage statements under California Labor Code section 226, waiting-time penalties under California Labor Code sections 201 through 203, and overtime underpayment under California Labor Code sections 510 and 1194. In addition, the payroll data is necessary to determine the extent to which AMA actually paid meal period premiums and rest period premiums during the class period, which is directly relevant to AMA's defenses and to the damages calculations for both the class claims and the PAGA representative claims.
As with the timekeeping data, this payroll data resides on NovaPay's servers in Emeryville, California and will be obtained via third-party subpoena.
E. Production Schedules / Call Sheets
AMA maintains an internal production management system that stores daily call sheets, production schedules, wrap reports, and daily production logs for all California-based show units. These documents are generated as a matter of course in the normal operation of each show unit and reflect the planned and actual schedule for each production day, including scheduled call times, wrap times, meal-period scheduling, and any notes regarding scheduling deviations or production delays.
The estimated volume of production scheduling documents is approximately 18,000 documents across all 14 show units for the class period. This figure is derived from an average of approximately 1,300 documents per show unit across the class period, encompassing daily call sheets, weekly production schedules, and wrap reports. The actual number per unit varies depending on the duration of each show unit's production run and whether the unit operates seasonally or year-round.
These documents are directly relevant to the hours-worked disputes at the heart of the case. The call sheets and wrap reports document the actual start and end times of production days, the scheduled meal-period breaks, and the pre-production and post-production activities that Plaintiffs allege gave rise to off-the-clock work. The production schedules also support AMA's defense that practices varied substantially across the 14 show units — a defense relevant to the commonality and predominance requirements at the class certification stage. At the same time, the documents may support Plaintiffs' claims by confirming that extended production days of 12 to 16 hours were common across multiple show units.
The documents exist in native formats, primarily Microsoft Excel spreadsheets and PDF files, and are stored on AMA's internal production management system. The system allows for bulk export of documents by show unit and date range, which facilitates efficient collection and production.
F. Meridian Solutions / Northgate Data Systems Messages
AMA utilizes both Meridian Solutions and Northgate Data Systems for internal communications. These messaging platforms are used extensively within AMA's production operations for day-to-day coordination among production staff, supervisors, and management. Messages are hosted in the cloud on Meridian Solutions's and Ashbury Holdings's respective infrastructure.
The estimated volume of potentially relevant messages across the identified custodians and relevant production channels during the class period is approximately 800,000 messages. This figure includes both direct messages between custodians and messages posted in relevant channels (e.g., production coordination channels, scheduling channels, HR-related channels).
These messages are potentially relevant because they may capture real-time communications regarding meal breaks, rest breaks, overtime, scheduling decisions, and employee complaints about break scheduling. Supervisor-to-employee communications about break scheduling are particularly relevant to the question of whether production coordinators and post-production assistants were "pressured" to work through breaks or off-the-clock, as alleged in the complaint.
However, the Meridian Solutions and Teams data presents a significant challenge from a proportionality standpoint. The volume is high (800,000 messages), the format is conversational and often informal, and a significant proportion of the messages are expected to be entirely irrelevant — casual social exchanges, logistics unrelated to the claims, and discussions of matters having nothing to do with scheduling, breaks, or hours of work. Full collection, processing, and review of 800,000 messages would impose a substantial cost that may not be justified by the likely yield of relevant, non-duplicative information. A carefully tailored approach, such as sampling or channel-specific collection, is warranted for this data source. Specific recommendations are discussed in Section V.D below.
G. Paper Documents (Pre-2019 Timesheets)
Prior to AMA's transition to the NovaPay TimeTrack Pro electronic timekeeping system on January 1, 2019, AMA maintained paper-based timekeeping records for its California employees. These paper timesheets have been transferred to offsite storage at an Cobalt Ridge Services Inc. facility (location details are on file with AMA's payroll and facilities departments).
The estimated volume of paper timesheets is approximately 15 banker's boxes. These records cover the period from November 1, 2018 through December 31, 2018 — the first approximately two months of the class period, during which AMA's non-exempt employees recorded their hours on manual timesheets rather than through the electronic TimeTrack Pro system.
The relevance of these paper records is limited by the narrow time period they cover. The class period spans more than four years, and the paper timesheets cover only the first two months. Any information contained in the paper timesheets for the pre-2019 period would supplement — but is unlikely to materially alter — the extensive electronic timekeeping data available from NovaPay for the remaining four-plus years of the class period.
The challenge presented by the paper timesheets is primarily one of cost. Manual retrieval from offsite storage, scanning, optical character recognition ("OCR") processing, quality assurance review, and production of 15 boxes of paper documents would be expensive and time-consuming relative to the limited temporal coverage and marginal incremental value of the data. Specific cost estimates and recommendations are discussed in Section V.F below.
H. Summary Table — Data Universe
The following table summarizes the data sources identified, their estimated volumes, locations, and formats:
This data universe represents a substantial body of information, but it is well-defined and manageable with a proportional approach to collection and production. The recommendations in Section V are designed to prioritize the most relevant and cost-effective data sources while managing the burden and expense associated with lower-yield or higher-cost categories.
IV. Legal Framework — Proportionality Under California Law
A. Governing Standard
The proportionality of discovery in California state court is governed primarily by Code of Civil Procedure section 2017.020, which provides that the court shall limit the scope of discovery if it determines that "the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence." This provision operates as a check on the broad scope of discovery otherwise available under Code of Civil Procedure section 2017.010, which permits discovery of any matter "not privileged, that is relevant to the subject matter involved in the pending action."
The California Supreme Court's decision in Williams v. Superior Court (2017) 3 Cal.5th 531 affirmed that proportionality is a fundamental principle of California discovery law and that courts must ensure that discovery is "proportional to the needs of the case." Although the Williams decision arose in the context of third-party consumer privacy objections, the Court's proportionality analysis drew on the same principles applicable to ESI proportionality disputes, including the consideration of burden, expense, relevance, and the availability of less burdensome alternatives.
California courts have increasingly looked to the proportionality factors set forth in Federal Rule of Civil Procedure 26(b)(1) as a useful framework for assessing proportionality in the ESI context. While the federal rules are not binding in California state court proceedings, the proportionality factors they articulate are consistent with the principles underlying Code of Civil Procedure section 2017.020 and have been widely adopted in California practice. Those factors include:
(1) The importance of the issues at stake in the action;
(2) The amount in controversy;
(3) The parties' relative access to relevant information;
(4) The parties' resources;
(5) The importance of the discovery in resolving the issues; and
(6) Whether the burden or expense of the proposed discovery outweighs its likely benefit.
These factors are not exclusive, and no single factor is dispositive. Rather, courts consider them in combination to arrive at a holistic assessment of whether the proposed scope of discovery is reasonable and proportional to the needs of the case.
Additional guidance on ESI-specific proportionality principles can be found in the California Civil discovery Act provisions governing ESI (CCP §§ 2031.280, 2031.310(h)), the Sedona Conference Commentary on Proportionality in Electronic discovery, and the Los Angeles County Superior Court's guidelines for ESI protocols in complex civil cases.
B. Application to This Case
The proportionality factors weigh in favor of a substantial — but carefully targeted — ESI production by AMA. The analysis of each factor is as follows:
Importance of the issues at stake. The importance of the issues at stake is high. This is a putative class action affecting approximately 1,850 non-exempt, hourly employees of AMA, asserting claims that implicate fundamental wage-and-hour protections under California law. The claims involve alleged violations of California's meal-and-rest-break requirements — protections that the California Supreme Court has recognized as serving vital public health and safety interests. See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1027-1028 (describing the protective purposes of meal-and-rest-break requirements). In addition, the case includes PAGA representative claims seeking civil penalties on behalf of the state, which serve the public interest in labor law enforcement. The entertainment industry context — in which long production hours are common and the potential for meal-and-rest-break violations is well documented — amplifies the significance of the issues. This factor weighs in favor of broad discovery.
Amount in controversy. The amount in controversy is substantial. Plaintiffs' claimed aggregate damages, as stated in the PAGA notice and complaint, total $38.6 million, which includes approximately $12.2 million in PAGA penalties. Our preliminary case assessment (Document 11) estimates AMA's realistic exposure at $8 million to $15 million, and our defense expert (when retained) is anticipated to estimate damages in the range of $5 million to $8 million. Even at the lower end of these ranges, the amount in controversy is sufficiently large to justify significant e-discovery expenditure. An estimated e-discovery cost of $200,000 to $275,000 — representing between 0.5% and 0.7% of Plaintiffs' claimed damages, or between 1.3% and 3.4% of AMA's estimated realistic exposure — is well within the range of proportionate discovery expense for a case of this magnitude. This factor supports the proposed production scope.
Parties' relative access to relevant information. AMA controls virtually all of the relevant timekeeping, payroll, and operational data that is at the heart of this case. The timekeeping records, payroll records, production schedules, call sheets, internal policies, HR records, and management communications are all in AMA's possession or under AMA's control (either directly or through its third-party service provider, NovaPay). Plaintiffs — individual non-exempt employees — have limited access to their own personal records, such as their own pay stubs and personnel files, and have essentially no access to the system-wide data necessary to analyze class-wide patterns of meal-and-rest-break compliance. This asymmetry in access to relevant information strongly favors broad production by AMA and weighs heavily in the proportionality analysis. We should be mindful that any effort to resist production of central data categories would likely be viewed unfavorably by the Court in light of this significant information asymmetry.
Parties' resources. AMA is well-resourced. As a wholly owned subsidiary of Aurelius Global Media Group PLC (LSE: AGMG), which has a market capitalization of approximately £3.82 billion (approximately $4.41 billion at current exchange rates), AMA has access to substantial financial resources. AMA's fiscal year 2022 United States revenue was $687.4 million. AMA has the financial capacity to support a reasonable ESI production without undue hardship. On the Plaintiffs' side, Castellano Byrne & Salas LLP is a well-established and well-resourced wage-and-hour class action firm with experience in complex employment litigation. This is not a case in which resource limitations on either side justify curtailing otherwise proportionate discovery. This factor is essentially neutral, though it undercuts any argument that AMA cannot afford to bear the cost of production.
Importance of the discovery in resolving the issues. The importance of the ESI to resolving the issues in this case is high. The case turns fundamentally on quantitative data — timekeeping records, payroll records, and operational schedules — that will determine whether AMA's auto-deduction policy resulted in systematic underpayment, whether off-the-clock work occurred, and whether meal-and-rest-break violations were widespread across the putative class. This data is indispensable to both the class certification analysis (which requires evidence of common questions of law and fact) and the merits analysis (which requires evidence of actual violations and damages). Email and messaging data provide the contextual evidence necessary to understand AMA's policies and practices, management awareness, and the circumstances surrounding alleged violations. Without this ESI, neither party can meaningfully litigate the case. This factor strongly favors production.
Burden or expense versus likely benefit. The estimated total e-discovery cost of $200,000 to $275,000 is proportionate to the needs of the case. As noted above, this cost represents a small fraction of the amount in controversy at any reasonable estimate. The burden of collection and production is manageable: the NovaPay timekeeping and payroll data exists in structured database format and can be extracted at relatively modest cost; the email data, while voluminous, can be effectively narrowed through keyword filtering and de-duplication; and the production schedules and call sheets exist as organized business records in electronic format. The areas of greatest cost concern — the Meridian Solutions/Teams messaging data and the pre-2019 paper timesheets — are addressed through targeted recommendations (sampling and limited production, respectively) that manage the burden while preserving access to potentially relevant information. On balance, the burden and expense of the proposed discovery do not outweigh its likely benefit. This factor supports the recommended approach.
In sum, the proportionality analysis supports a substantial ESI production by AMA, consistent with the recommendations set forth in Section V below.
V. Recommended Approach by Data Source
The following recommendations reflect our assessment of the appropriate production approach for each category of ESI, taking into account the proportionality factors discussed above, the estimated costs of collection and production, and our assessment of each data source's relevance to the claims and defenses at issue.
A. Timekeeping and Payroll Data (NovaPay) — Full Production
Recommendation: Full production of all timekeeping and payroll data from NovaPay Solutions Inc. for all California non-exempt employees during the class period (November 1, 2018 through the present).
Rationale: The NovaPay timekeeping and payroll data constitutes the single most critical evidence set in this case. It is structured data — stored in a relational database — that can be extracted and formatted for production at a modest cost relative to its value. Both sides will need this data for class certification analysis (to demonstrate or contest common patterns of auto-deduction application, meal-period compliance, and premium pay) and for damages analysis (to quantify the scope and value of alleged underpayments). There is no proportionality-based justification for limiting the scope of this production; the data is directly relevant, the cost of extraction is low, and the data is indispensable to the resolution of the core issues.
Data to include: The production should encompass all of the following data elements from the NovaPay TimeTrack Pro system and the associated payroll records:
• All punch records (clock-in, clock-out, meal-period start, meal-period end) for California non-exempt employees during the class period;
• All auto-deduction records, including records reflecting when the 30-minute auto-deduction was applied and whether it was subsequently reversed or adjusted;
• All Missed Meal Attestation records submitted by employees, including the date, time, employee identifier, and any system-generated notes or flags;
• System configuration logs for the TimeTrack Pro system, including historical records reflecting the activation and deactivation of the Missed Meal Attestation feature at each facility, the configuration of the auto-deduction threshold (including any changes to the threshold over time), and any system-wide or facility-specific parameter changes;
• Payroll summary reports, including gross wages, overtime wages, meal period premiums paid, rest period premiums paid, deductions, and withholdings, broken down by employee and by pay period.
Format: We will request that NovaPay produce this data in delimited text format (CSV or tab-delimited), suitable for import into database analysis tools such as Ridgeway Data Systems, SQL Server, or specialized litigation analytics platforms. The production should include accompanying data dictionaries and field descriptions sufficient to enable interpretation of the data without reliance on NovaPay's proprietary software interface.
Estimated cost: Approximately $25,000 for extraction, formatting, and quality assurance. This cost reflects NovaPay's standard data extraction fees, AMA's internal IT coordination time, and Marlowe Asset Management's ingestion and quality-control process.
Note: Because this data is held by NovaPay, a third-party subpoena duces tecum will be required. The subpoena is currently in preparation. We are coordinating with AMA's in-house team (Gregory Tanaka) and NovaPay's data services contact (Marcus Yee) to ensure that the subpoena scope is appropriately tailored and that NovaPay is prepared to respond within a reasonable timeframe. We anticipate serving the subpoena in early February 2023, with a return date allowing sufficient time for NovaPay to compile and produce the data in advance of the class certification briefing schedule.
B. Email — Custodial Collection with Keyword Filtering
Recommendation: Collect email from the seven identified custodians, apply agreed-upon keyword search terms, de-duplicate, and produce responsive, non-privileged documents.
Custodian limitation rationale: The seven custodians identified in Section III.B represent the key individuals with knowledge of AMA's timekeeping and payroll practices, meal-and-rest-break policies, production scheduling, and HR complaints related to wage-and-hour issues. These custodians were identified through the litigation hold process and confirmed through custodian interviews conducted during the initial case assessment. Expanding beyond these seven custodians would significantly increase the volume of email to be collected, processed, and reviewed — and would do so without a proportionate increase in the likelihood of identifying relevant, non-duplicative information. Additional custodians (e.g., individual production supervisors, facility managers, or lower-level HR staff) are more likely to generate high volumes of irrelevant email while duplicating the substantive communications already captured through the seven identified custodians. If Plaintiffs' counsel identifies specific additional custodians with particularized relevance, we can assess whether their inclusion is warranted on a case-by-case basis.
Search term approach: We propose to negotiate a set of keyword search terms with Plaintiffs' counsel to narrow the 4.2 million-email universe to a manageable, reviewable subset. The use of agreed-upon keyword search terms is a well-established ESI protocol mechanism that balances the parties' interests in ensuring comprehensive production against the need to control volume and cost.
Our preliminary search term list includes terms and phrases related to the core factual issues in the case:
• "meal break," "meal period," "rest break," "rest period"
• "auto-deduction," "auto deduction," "automatic deduction"
• "TimeTrack," "TimeTrack Pro," "NovaPay"
• "overtime," "OT," "time and a half," "double time"
• "off the clock," "off-the-clock," "unpaid"
• "pre-call," "call time," "wrap," "wrap time"
• "missed meal," "short meal," "shortened meal," "skipped meal"
• "attestation," "missed meal attestation"
• "premium pay," "meal premium," "rest premium"
• "Wage Order 12," "IWC," "Labor Code"
• Variants and combinations of the foregoing, including proximity searches where supported by the review platform
We will circulate this proposed search term list to Plaintiffs' counsel and invite their input. The goal is to reach agreement on a final, mutually acceptable term list that captures the relevant communications while excluding irrelevant material. We anticipate that the final term list will be memorialized in the ESI Protocol Stipulation or in a separate, contemporaneous search term agreement.
Estimated post-filtering volume: Approximately 150,000 documents after keyword filtering and global de-duplication. This estimate is based on preliminary testing and may vary depending on the final search term list and any additional narrowing criteria agreed upon with Plaintiffs' counsel.
Review: Attorney review for responsiveness, privilege, and confidentiality designation under the Protective Order will be conducted by the C&H litigation team, with support from our e-discovery vendor, Marlowe Asset Management Litigation Technology Inc. (600 Anton Boulevard, Suite 900, Costa Mesa, California 92626). The review will be conducted using Marlowe Asset Management's Relativity-based document review platform, which enables efficient coding, quality control, and privilege review workflows. The review team will consist of a combination of paralegal reviewers (for initial responsiveness review) and associates (for privilege review and quality control), supervised by senior associates and counsel.
Production format: Responsive, non-privileged documents will be produced in image format (TIFF/PDF) with extracted text and metadata, consistent with standard Los Angeles County Superior Court practice for ESI productions. Email messages will be produced with full header information, and attachments will be produced as separate documents linked to their parent emails through Bates numbering and a load file.
Estimated cost: Approximately $175,000, broken down as follows:
The attorney review cost of $95,000 reflects an assumed blended review rate across paralegals and associates, applied to the estimated 150,000-document review set. The actual cost may vary depending on the final search term hit rates and the proportion of documents requiring detailed privilege analysis.
Privilege logging: Documents withheld on privilege grounds (attorney-client privilege, work product protection) will be identified on a privilege log produced on a rolling basis. Given the volume of privileged documents likely to be encountered — particularly in the mailbox of Gregory Tanaka, VP Legal & Compliance — we recommend a categorical privilege log approach for large-volume privilege categories. Specifically, we will propose that categories of attorney-client communications between AMA personnel and C&H or AMA in-house counsel regarding this matter or related wage-and-hour compliance issues be logged categorically, with individual entries reserved for discrete privileged documents that do not fall within the defined categories. This approach is consistent with the trend in California practice toward categorical privilege logging in complex litigation, and we anticipate that Plaintiffs' counsel will be receptive to a reasonable categorical log proposal.
C. Production Schedules / Call Sheets — Full Production in Native Format
Recommendation: Produce all daily call sheets, production schedules, and wrap reports from AMA's production management system for the class period, in native format (Excel, PDF).
Rationale: These documents are pre-existing business records that are maintained in an organized, searchable format within AMA's production management system. They are directly relevant to the hours-worked disputes that lie at the core of the case: the call sheets and production schedules document the planned and actual start and end times for each production day, the scheduled meal-period breaks, and the pre-production and post-production activities that Plaintiffs allege gave rise to off-the-clock work. The wrap reports provide a contemporaneous record of the actual completion of each production day, including any deviations from the planned schedule.
Because the production management system allows for efficient bulk export of documents by show unit and date range, the burden of collecting and producing these documents is relatively low. The documents are already in electronic format and do not require significant processing or review for responsiveness — they are uniformly relevant as business records bearing on the hours-worked and scheduling issues in the case. The primary review task will be a targeted privilege review to confirm that no documents embed privileged attorney-client communications (which is unlikely given the operational nature of the documents, but which should be confirmed through a representative sampling review).
Estimated cost: Approximately $15,000 for export from the production management system, quality assurance review, and production formatting.
D. Meridian Solutions / Northgate Data Systems — Sampling Approach
Recommendation: Propose a sampling approach rather than full production of all Meridian Solutions and Northgate Data Systems messages.
Proposal: We recommend producing Meridian Solutions and Teams messages from two representative show units — one studio-based unit and one field-based unit, to be selected by agreement with Plaintiffs' counsel — for the class period, rather than from all 14 show units. This sampling approach would capture communications from two operationally distinct environments, providing a meaningful and representative data set for class certification analysis while avoiding the disproportionate cost and burden of reviewing 800,000 messages in their entirety.
Rationale: Full production of the approximately 800,000 messages across all custodians and relevant channels would impose a substantial cost — an estimated $80,000 or more for collection, processing, and review — and would yield a high proportion of irrelevant material. Meridian Solutions and Teams communications are, by their nature, conversational, informal, and frequently unrelated to the matters at issue. A significant majority of the messages are expected to consist of routine logistical coordination, social exchanges, and discussions of topics that have no bearing on meal-and-rest-break compliance, timekeeping practices, or employee scheduling. Full review of this volume of conversational data would be labor-intensive and would produce substantial expense for a marginal increase in relevant, non-duplicative information beyond what will be captured through the email production.
By contrast, a sampling approach — focused on two representative show units selected to reflect the range of AMA's production operations — provides a proportionate alternative. The sampled data will enable Plaintiffs' experts to analyze messaging patterns, identify supervisor communications regarding break scheduling, and assess whether the messaging data corroborates or contradicts the timekeeping and operational data. If the initial sample reveals material information warranting broader production, the parties can agree to expand the scope at that time.
Phased alternative: If Plaintiffs insist on broader production, we can propose a phased approach as a compromise: produce messages from two show units initially, with an agreement to expand to additional show units if the initial sample reveals material information that suggests broader production would yield significant relevant evidence. This phased approach is consistent with proportionality principles and with the approach endorsed by courts in cases involving large volumes of messaging data.
Estimated cost (sampling approach): Approximately $20,000.
Estimated cost (full production): $80,000 or more.
E. HR System Records — Targeted Production
Recommendation: Produce a targeted subset of HR system records, calibrated to the distinct needs of the class certification and merits phases.
Specifically, we recommend the following production scope:
• Named plaintiffs: Produce complete personnel files and related HR records for the three named plaintiffs: Marisol Fuentes, Derek Halloran, and Yesenia Padilla. These files should include employment agreements, offer letters, job descriptions, performance evaluations, disciplinary records, complaint or grievance records, and any correspondence related to the named plaintiffs' employment.
• Class-wide data (aggregate format): Produce class-wide employee data in summary or aggregate format, including an employee roster reflecting hire dates, separation dates, job titles, facility assignments, hourly rates, and employment status (active or terminated) for all putative class members during the class period. This data can be extracted from the HRIS in tabular format and produced as a structured data file (CSV or Excel).
• Policies and training materials: Produce AMA's meal-and-rest-break policies, employee handbooks (including all versions in effect during the class period, with the most recent revision dated March 2021), training materials related to wage-and-hour compliance (including any supervisor training materials regarding meal-and-rest-break obligations under Wage Order 12), and any written policy directives or memoranda related to timekeeping practices, auto-deduction procedures, or premium pay calculations.
• Complaint and grievance records: Produce records of HR complaints and grievances related to wage-and-hour issues, meal-and-rest-break violations, off-the-clock work, or similar subjects, for the class period. These records may be maintained in the HRIS's complaint tracking module or in separate files.
Rationale: Full production of all 1,850 personnel files would be disproportionately burdensome. Each personnel file contains a mix of relevant and irrelevant material — employment agreements and job descriptions are relevant, while performance evaluations, benefits enrollment forms, and tax withholding documents are generally not. Producing all 1,850 files would require individual review for responsiveness, privilege, and confidentiality, at a cost that would be disproportionate to the incremental information gained. The targeted approach described above provides Plaintiffs with the information needed for both class certification (the aggregate employee data, policies, and training materials) and merits analysis (the named plaintiffs' complete files and the complaint/grievance records), while managing scope and cost.
Estimated cost: Approximately $10,000 for data extraction, formatting, review, and production.
F. Paper Documents (Pre-2019 Timesheets) — Limited Production
Recommendation: Produce available payroll summary records and any applicable policies in effect during the pre-January 1, 2019 period (November 1, 2018 through December 31, 2018). Do not scan and produce the full 15 banker's boxes of paper timesheets.
Rationale: The pre-2019 period covers only approximately two months of the class period — a narrow temporal slice that represents less than 4% of the total class period. Full scanning and OCR processing of 15 boxes of paper timesheets would cost an estimated $30,000, accounting for retrieval from Cobalt Ridge Services Inc., physical scanning at production-grade resolution, OCR processing to create searchable text, quality assurance review of the OCR output, responsiveness and privilege review, and production formatting. This cost is disproportionate to the marginal benefit of producing manual timekeeping records for a two-month period when four-plus years of comprehensive electronic timekeeping data is available from NovaPay.
Payroll summary records from the pre-2019 period — which aggregate the timekeeping data into payroll-level summaries reflecting hours worked, overtime, and wages paid — can likely be obtained from AMA's prior payroll provider or from AMA's internal accounting records at a fraction of the cost of scanning the underlying timesheets. These summary records, combined with any meal-and-rest-break policies in effect during the pre-2019 period, will provide Plaintiffs with a reasonable basis for analyzing the pre-2019 class period claims.
Alternative: As an additional or alternative accommodation, we can offer to make the original paper timesheets available for inspection at a mutually convenient location, pursuant to Code of Civil Procedure section 2031.280(a). This would allow Plaintiffs' counsel to review the paper timesheets in their original form and to select specific documents for copying, without requiring AMA to bear the full cost of scanning and processing the entire 15-box collection.
Estimated cost (summary records approach): Approximately $5,000.
VI. Total Estimated E-discovery Cost
The following table summarizes the estimated e-discovery costs for each data source under the recommended approach:
The range of $200,000 to $275,000 accounts for variability in several key drivers of e-discovery cost, including: (a) search term hit rates, which directly affect the volume of email documents requiring attorney review; (b) potential expansion of the Meridian Solutions and Teams production scope if Plaintiffs push back on the sampling approach and insist on a broader or phased production; (c) the possible need for supplemental productions to address newly identified documents, updated search term lists, or additional custodians; and (d) the potential for discovery disputes requiring motion practice, which would generate additional attorney time and vendor costs.
This estimate is consistent with the Phase 3 budget of $275,000 for e-discovery expenses, as established in the Budget Memorandum (Document 6) and approved by the client.
VII. E-discovery Vendor
C&H's e-discovery vendor for this matter is Marlowe Asset Management Litigation Technology Inc., located at 600 Anton Boulevard, Suite 900, Costa Mesa, California 92626. Marlowe Asset Management is a full-service litigation technology provider with extensive experience in complex employment class action discovery. Marlowe Asset Management will handle the following functions: collection of custodial data from AMA's Exchange/Ashbury Software environment and other electronic systems; processing of collected data (including keyword filtering, de-duplication, and indexing); hosting of processed data on Marlowe Asset Management's Relativity-based document review platform for attorney review; and production of responsive documents in the agreed-upon format (TIFF/PDF with extracted text and metadata, or native format, as applicable).
C&H's litigation support group will serve as the primary point of coordination with Marlowe Asset Management and will oversee all aspects of the e-discovery workflow, including quality assurance, data validation, and production tracking.
Marlowe Asset Management's estimated processing volume is approximately 150,000 documents, representing the post-filtering and de-duplication universe of reviewable documents. The total volume of documents produced to Plaintiffs is estimated at approximately 147,000 to 150,000 documents, comprising an estimated 1.2 million pages. This production volume estimate reflects the combination of the filtered email universe, the production schedules and call sheets, the timekeeping and payroll data (produced in structured format), the targeted HR records, and the limited pre-2019 summary records.
VIII. ESI Protocol — Key Terms for Negotiation
The following summarizes the key terms that we propose to include in the ESI Protocol Stipulation, which is to be negotiated with Castellano Byrne & Salas LLP and, if necessary, with Veltrano Employment Law Group PC. The ESI Protocol Stipulation will govern the scope, format, and procedures for ESI production by both parties. The stipulation is targeted for finalization and court entry on or about January 13, 2023.
1. Production format. Spreadsheets, databases, and structured data files shall be produced in native format (e.g., Excel, CSV, tab-delimited text) to preserve formulas, embedded data, and analytical functionality. Emails and word-processing documents shall be produced in image format (TIFF or PDF) with extracted text, metadata, and Bates numbering, accompanied by standard load files (concordance DAT or equivalent). Metadata fields to include, at a minimum: author, date created, date modified, date sent, date received, sender, recipients (to/cc/bcc), subject line, file name, file path, custodian, and production Bates range.
2. Search methodology. The parties shall agree upon a set of keyword search terms to be applied to custodial email collections. The keyword search terms shall be negotiated in good faith, with each party having the opportunity to propose terms and to object to terms it believes are overbroad or likely to generate a disproportionate volume of irrelevant results. The agreed-upon keyword searches shall be supplemented by targeted custodial review for specific topics as necessary, including review of identified file folders, document categories, or subject-matter areas that may not be adequately captured by keyword searches alone.
3. Custodian list. AMA's initial custodian list shall consist of the seven individuals identified in Section III.B of this memorandum. Plaintiffs' custodians shall be identified by Plaintiffs' counsel. Either party may propose additional custodians upon a showing of good cause and proportionality, subject to the other party's right to object.
4. De-duplication. Global de-duplication shall be performed across all custodians using MD5 hash values for email de-duplication. Where an identical email appears in multiple custodians' mailboxes, one instance shall be produced and the other custodians in whose mailboxes the email appeared shall be identified in the metadata.
5. Privilege logging. Privileged documents shall be identified on a privilege log produced on a rolling basis, with initial privilege log entries due within 30 days of each production. For large-volume privilege categories — including attorney-client communications with C&H or AMA in-house counsel regarding this matter, related wage-and-hour compliance matters, or the underlying litigation hold — the parties shall use a categorical privilege log format, identifying the category of communication, the general subject matter, the time period, and the basis for the privilege assertion. Individual privilege log entries shall be provided for discrete privileged documents that do not fall within a defined category.
6. Clawback provisions. The ESI Protocol shall include clawback provisions protecting against inadvertent waiver of privilege, pursuant to California Evidence Code section 912 and the functional equivalent of Federal Rule of Evidence 502(d). Specifically, inadvertent production of a privileged document shall not constitute a waiver of the attorney-client privilege or work product protection if the producing party took reasonable steps to prevent disclosure and promptly took reasonable steps to rectify the error upon discovery of the inadvertent production, including providing written notice of the privilege claim to the receiving party and requesting return or destruction of the inadvertently produced document and all copies.
7. Proportionality limitations. The ESI Protocol shall incorporate proportionality limitations consistent with the analysis in this memorandum, including: (a) custodian limitations (seven AMA custodians, absent agreement or court order for expansion); (b) time-period limitations (the class period of November 1, 2018 through the present); and (c) search-term limitations (agreed-upon keyword search terms applied to email and messaging data). These limitations shall be without prejudice to either party's right to seek modification of the ESI Protocol upon a showing of good cause and proportionality.
8. Phased production. Productions shall be made on a rolling basis on a reasonable schedule. AMA shall make its initial production within 30 days of the entry of the ESI Protocol Stipulation, with supplemental productions on a two-week rolling basis thereafter until the production is substantially complete. Plaintiffs shall produce their documents on a reciprocal schedule, with initial production within 30 days of AMA's initial production.
IX. Anticipated Plaintiffs' Document Production
Plaintiffs' c