1017-00004 · Entities. Aurelius Global Media Group · Pleadings/Class Action

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CALDERWOOD & HARKNESS LLP CONFIDENTIAL — ATTORNEY WORK PRODUCT — DRAFT

[Working Draft — For Internal Review and Client Comment — Not for Filing]

December 12, 2022

Matter No.: 1017-00004

Prepared by: Devon Archer, with review by Renata Vasquez

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES — CENTRAL DISTRICT

Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant"), by and through its attorneys of record, Calderwood & Harkness LLP, hereby answers the Complaint filed by Plaintiff Marisol Fuentes ("Plaintiff") on November 1, 2022, and each and every cause of action set forth therein, as follows.

GENERAL DENIAL

Pursuant to California Code of Civil Procedure § 431.30(d), Defendant generally denies each and every allegation contained in the Complaint, including but not limited to each and every allegation contained in each cause of action set forth therein. Defendant further denies that Plaintiff or any putative class member has been damaged in any amount whatsoever, or that Plaintiff or any putative class member is entitled to any relief, whether in the form of damages, restitution, penalties, injunctive relief, declaratory relief, attorneys' fees, costs, or any other form of recovery, as a result of any act or omission by Defendant. Defendant denies that it has violated any provision of the California Labor Code, any applicable Industrial Welfare Commission ("IWC") Wage Order, the California Business and Professions Code, the Private Attorneys General Act ("PAGA"), or any other statute, regulation, or common law duty as alleged in the Complaint or otherwise.

AFFIRMATIVE DEFENSES

Without admitting any of the allegations in the Complaint, and without assuming the burden of proof on any issue as to which Defendant would not otherwise bear such burden at trial or on any dispositive motion, and without waiving any objections, defenses, or rights that may be available to Defendant, including but not limited to the right to amend or supplement this Answer and these affirmative defenses, Defendant asserts the following affirmative defenses to Plaintiff's Complaint:

FIRST AFFIRMATIVE DEFENSE

(Failure to State a Claim). The Complaint, and each and every cause of action set forth therein, fails to state facts sufficient to constitute a cause of action against Defendant. The Complaint fails to allege with the requisite specificity the factual basis for any of Plaintiff's claims, including but not limited to the particular policies, practices, or conduct that allegedly violated the California Labor Code or any applicable IWC Wage Order. To the extent any cause of action in the Complaint is based upon conclusory allegations, legal conclusions, or allegations that are contradicted by the documents and records referenced therein, such cause of action fails as a matter of law. The Complaint does not adequately plead the elements necessary to state a viable claim for any of the causes of action asserted, including but not limited to Plaintiff's claims for alleged meal period violations, rest period violations, unpaid overtime, unpaid minimum wages, non-compliant wage statements, waiting time penalties, unfair business practices under Business and Professions Code § 17200, or civil penalties under PAGA.

SECOND AFFIRMATIVE DEFENSE

(Statute of Limitations). Plaintiff's claims, and those of the putative class, are barred in whole or in part by the applicable statutes of limitations and limitations periods, including but not limited to the following:

(a) California Code of Civil Procedure § 338, which imposes a three-year statute of limitations on claims for statutory penalties and other obligations created by statute, including claims for meal period premium pay, rest period premium pay, and wage statement penalties under the California Labor Code;

(b) California Code of Civil Procedure § 340, which imposes a one-year statute of limitations on penalty claims, to the extent any of Plaintiff's claims are properly characterized as penalty claims subject to the one-year period;

(c) California Labor Code § 203, which provides that waiting time penalties are subject to the applicable statute of limitations governing the underlying wage claim;

(d) California Business and Professions Code § 17208, which imposes a four-year statute of limitations on claims brought under the Unfair Competition Law ("UCL"), Business and Professions Code §§ 17200, et seq.; and

(e) California Labor Code § 2699.3, which imposes a one-year statute of limitations on PAGA claims, running from the date of the alleged violation.

The class period as pled in the Complaint runs from November 1, 2018 to the present. To the extent any claims or causes of action asserted in the Complaint — whether on behalf of Plaintiff individually, the putative class, or as PAGA representative claims — are predicated upon conduct, policies, practices, or alleged violations occurring outside the applicable three-year limitations period for statutory penalties, the four-year limitations period for UCL claims, or the one-year limitations period for PAGA claims, such claims are time-barred and must be dismissed. Defendant reserves the right to further refine its statute of limitations defense based on information obtained in discovery, including as to the specific dates of any alleged violations and the applicable accrual dates.

THIRD AFFIRMATIVE DEFENSE

(Compliance with Law). At all relevant times, Defendant maintained and implemented lawful policies, procedures, and practices regarding meal periods, rest periods, overtime compensation, minimum wage payment, itemized wage statement issuance, final pay timing, and all other aspects of its employment relationship with Plaintiff and the putative class members, in compliance with all applicable provisions of the California Labor Code, the applicable IWC Wage Orders (including, without limitation, Wage Order No. 12-2001, pertaining to the Motion Picture Industry), and all other applicable federal, state, and local laws and regulations.

Specifically, and without limitation:

(a) AMA has at all relevant times maintained facially compliant written policies governing meal periods, rest periods, and timekeeping, as set forth in AMA's Employee Handbook (most recently revised in March 2021). The Employee Handbook provides, among other things, for thirty (30) minute uninterrupted duty-free meal periods for all non-exempt employees working shifts in excess of five (5) hours, and for ten (10) minute paid rest periods for every four (4) hours of work or major fraction thereof, consistent with California Labor Code §§ 226.7, 512, and the applicable provisions of Wage Order No. 12.

(b) AMA utilizes the NovaPay Solutions "TimeTrack Pro" electronic timekeeping system across all seven (7) of its California production facilities. The TimeTrack Pro system includes built-in mechanisms for employees to report missed, shortened, or interrupted meal periods, and automatically generates premium pay entries when employees record meal periods of fewer than thirty (30) minutes. The system also captures actual clock-in and clock-out times for all non-exempt employees and calculates overtime in accordance with California's daily and weekly overtime requirements under Labor Code § 510.

(c) AMA's written meal and rest period policies were distributed to all non-exempt employees, including Plaintiff, and employees were required to acknowledge receipt of such policies. AMA conducted regular training for supervisors and production managers regarding their obligation to provide, authorize, and permit meal and rest periods in compliance with California law.

Defendant's policies and practices were designed to, and did, comply with all applicable legal requirements. Any alleged violation of law, to the extent one occurred, was not the result of any policy, practice, or directive of AMA, but rather was the result of individual employees' voluntary choices, individual supervisor error, or other circumstances beyond AMA's control.

FOURTH AFFIRMATIVE DEFENSE

(Good Faith). At all relevant times, Defendant acted in good faith and with a reasonable, good faith belief that its policies, practices, and compensation procedures complied with all applicable provisions of the California Labor Code, the applicable IWC Wage Orders, and all other applicable laws and regulations. Defendant's good faith compliance with applicable law constitutes a complete defense, or a basis for reduction of penalties, with respect to certain penalty claims asserted in the Complaint, including but not limited to:

(a) PAGA penalties, for which the Court has discretion to reduce penalties where the employer's violation was not willful and the employer acted in good faith, pursuant to California Labor Code § 2699(e)(2); and

(b) Waiting time penalties under California Labor Code § 203, for which a good faith dispute as to the amount of wages owed provides a complete defense. See Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7.

AMA consulted with outside employment counsel regarding its meal and rest period policies, its timekeeping system configuration, and its wage statement format, and relied in good faith upon the advice received. AMA's policies and practices were implemented with the intent and design of complying fully with California law, and any inadvertent errors or shortcomings, to the extent they occurred, were not the product of willful disregard for legal obligations.

FIFTH AFFIRMATIVE DEFENSE

(Waiver / Estoppel). Plaintiff's claims, and those of the putative class, are barred in whole or in part by the doctrines of waiver, estoppel, and laches, including but not limited to the voluntary waiver by Plaintiff and putative class members of meal periods and rest periods that were authorized, permitted, and made available by Defendant.

Under the California Supreme Court's holding in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, an employer's obligation with respect to meal periods is to provide such breaks — that is, to relieve the employee of all duties and relinquish control over the employee's activities during the break period — not to ensure that every employee actually takes each break in its entirety. The same principle applies with respect to rest periods, which an employer must authorize and permit but need not police or compel employees to take. See id. at 1040–41.

To the extent Plaintiff or any putative class member voluntarily chose to forgo, shorten, or work through meal or rest periods that AMA had provided, authorized, and permitted, AMA is not liable for any resulting claims. The doctrines of waiver and estoppel preclude Plaintiff and the putative class from recovering for the voluntary relinquishment of break periods that were made available to them in compliance with law.

Additionally, to the extent Plaintiff or any putative class member unreasonably delayed in asserting claims or complaints regarding alleged meal period, rest period, or wage violations, the doctrine of laches bars or limits such claims. Plaintiff's delay in bringing the claims alleged in the Complaint, to the extent such delay caused prejudice to Defendant, independently supports application of the laches doctrine.

SIXTH AFFIRMATIVE DEFENSE

(Offset and Recoupment). To the extent Plaintiff or any putative class member has already received payment for meal period premium pay, rest period premium pay, overtime compensation, or any other form of wages or compensation relating to the claims alleged in the Complaint, any recovery to which Plaintiff or any class member may ultimately be found to be entitled is subject to offset and recoupment for amounts already paid. Defendant is entitled to credit for all wages, premiums, penalties, and other compensation previously paid to Plaintiff and the putative class members, such that no double recovery may be obtained.

AMA's records reflect that premium pay was generated and paid through the TimeTrack Pro system in certain instances where employees recorded meal periods of fewer than thirty (30) minutes. Defendant is entitled to offset any judgment or award against such prior payments, as well as against any other payments made to Plaintiff or putative class members that relate to the claims asserted in the Complaint.

SEVENTH AFFIRMATIVE DEFENSE

(De Minimis). Plaintiff's claims for alleged off-the-clock work, to the extent they involve trivial, irregular, or de minimis amounts of time that are administratively difficult to record, are not compensable under the de minimis doctrine.

Defendant acknowledges that the California Supreme Court in Troester v. Starbucks Corp. (2018) 5 Cal.5th 829, held that the federal de minimis doctrine does not apply in the same manner under California law, and that California's wage and hour statutes generally require compensation for all hours worked. However, the Troester court declined to foreclose entirely the possibility that a de minimis principle might apply in limited circumstances under California law, noting that "some amount of time will be so minute or irregular that it is unreasonable to require compensation." Id. at 847–48. The Court explicitly left open the question of "whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded." Id. at 848.

To the extent Plaintiff's claims encompass truly trivial time increments — such as the time required to boot up computers, log into systems, or perform similarly brief pre-shift or post-shift tasks — the de minimis doctrine, or an analogous principle of reasonableness, precludes recovery. While Defendant acknowledges that the alleged off-the-clock time as pled in the Complaint (approximately thirty to forty-five minutes pre-shift and fifteen to thirty minutes post-shift) may be too substantial for this defense to apply broadly, Defendant preserves this defense for application to any truly trivial time increments that may be identified through discovery. This defense is particularly relevant to the extent individual class members' claims involve minimal or sporadic time that was not systematically required by AMA's policies or practices.

EIGHTH AFFIRMATIVE DEFENSE

(Lack of Standing — UCL Claim). Plaintiff lacks standing to bring her Third Cause of Action under the Unfair Competition Law, California Business and Professions Code § 17200, et seq., because she has not suffered an "injury in fact" and has not "lost money or property as a result of the unfair competition," as required by Proposition 64 (approved by California voters in November 2004) and codified in Business and Professions Code § 17204. Under the standing requirements imposed by Proposition 64, a private plaintiff may bring a UCL claim only if she demonstrates that she has suffered actual injury and that such injury was caused by the defendant's allegedly unfair business practice. See Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.

To the extent Plaintiff's UCL cause of action is predicated solely upon the same alleged wage losses and Labor Code violations underlying her other causes of action, the UCL claim is duplicative and fails to allege an independent basis for standing. If Plaintiff has not suffered actual injury as a result of the alleged Labor Code violations — an allegation that Defendant denies — then she likewise lacks standing to pursue a derivative UCL claim. Moreover, to the extent the UCL claim seeks only the same relief available under the Labor Code causes of action, it is unnecessary and should be dismissed as superfluous.

NINTH AFFIRMATIVE DEFENSE

(No Class Certification). Plaintiff's claims are not appropriate for class treatment under California Code of Civil Procedure § 382 or any other provision of law. Defendant will oppose any motion for class certification on the grounds that Plaintiff has not and cannot satisfy the requirements for class certification, including but not limited to:

(a) Predominance. Common questions of law and fact do not predominate over individual questions. The resolution of the claims alleged in the Complaint will require individualized inquiries into each putative class member's specific job duties, work schedules, meal and rest period practices, supervisory interactions, voluntary break waivers, and compensation history. These individualized issues overwhelm any common questions and render class treatment inappropriate.

(b) Typicality. The named Plaintiff is not typical of the putative class. Plaintiff's individual employment history, job classification, facility assignment, production unit, supervisory chain, and meal and rest period experiences are not representative of the experiences of the approximately 1,850 non-exempt, hourly employees across AMA's seven California production facilities and fourteen distinct production units who comprise the putative class.

(c) Adequacy. The named Plaintiff is not an adequate class representative. Plaintiff's individual circumstances, interests, and potential defenses may be antagonistic to, or divergent from, those of other putative class members, rendering her an inadequate representative.

(d) Superiority. A class action is not a superior method of adjudicating the claims alleged in the Complaint. Given the highly individualized nature of the factual inquiries required, alternative methods of adjudication — including individual claims, representative PAGA proceedings, or other mechanisms — are superior to class treatment.

The putative class of approximately 1,850 non-exempt, hourly employees spans seven (7) California production facilities and fourteen (14) distinct production units, each operating under Wage Order No. 12 but with significant variation in scheduling practices, production types, crew configurations, and supervisory discretion. See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (recognizing that individualized issues regarding whether employer provided breaks can defeat class certification). These variations preclude a finding that common issues predominate or that class treatment is manageable or superior.

TENTH AFFIRMATIVE DEFENSE

(Individual Variation). The claims of the putative class members are subject to material individual variations in working conditions, schedules, job duties, supervisory structures, and meal and rest break practices that preclude class-wide adjudication or any class-wide presumption of liability. The putative class encompasses non-exempt, hourly employees spread across AMA's seven California production facilities, each of which operates under distinct conditions:

1. 8500 Sunset Blvd., Suite 1400, West Hollywood, CA 90069 — Headquarters and post-production facility;

2. 4024 Penmark Strategy Partners Avenue, Studio City, CA 91604 — Stage A and Stage B, unscripted programming;

3. 15301 Ventura Blvd., Suite 300, Sherman Oaks, CA 91403 — Digital content production;

4. 3800 W. Alameda Ave., Burbank, CA 91505 — Live events and field production;

5. 1438 N. Gower Street, Hollywood, CA 90028 — Scripted development;

6. 2120 Colorado Avenue, Santa Monica, CA 90404 — E-commerce studio; and

7. 888 N. Sepulveda Blvd., El Segundo, CA 90245 — Post-production annex.

In addition to these seven facilities, AMA operates fourteen (14) distinct production units, each functioning under Wage Order No. 12 but with materially varying schedules, production types (studio-based production, field-based production, live events, post-production, and digital content), crew sizes, call time structures, and supervisory practices. The determination of liability on Plaintiff's meal period, rest period, overtime, and off-the-clock claims will necessarily turn on the specific working conditions, supervisory decisions, and individual experiences of each class member within his or her particular facility and production unit. These individualized inquiries cannot be resolved on a class-wide basis and independently preclude class certification.

ELEVENTH AFFIRMATIVE DEFENSE

(No PAGA Standing — Failure to Exhaust Administrative Requirements). To the extent Plaintiff asserts claims under the Private Attorneys General Act of 2004, California Labor Code §§ 2698–2699.8 ("PAGA"), Plaintiff's PAGA claims are barred because Plaintiff failed to comply with the mandatory pre-suit notice and exhaustion requirements of California Labor Code § 2699.3.

California Labor Code § 2699.3(a)(2)(A) requires that an aggrieved employee provide written notice to the Labor and Workforce Development Agency ("LWDA") and to the employer of the specific provisions of the Labor Code alleged to have been violated, including the facts and theories to support the alleged violation. Upon providing such notice, the aggrieved employee must wait sixty-five (65) calendar days before commencing a civil action, unless the LWDA notifies the employee and the employer within that period that it intends to investigate the alleged violation.

The record reflects that Plaintiff filed her PAGA notice with the LWDA on September 15, 2022. The sixty-five (65) day waiting period therefore would not have expired until November 19, 2022. Plaintiff, however, filed the instant Complaint on November 1, 2022 — eighteen (18) days before the expiration of the mandatory sixty-five (65) day waiting period. This premature filing is a jurisdictional defect that deprives Plaintiff of standing to pursue PAGA claims in this action.

Defendant acknowledges that certain courts have held that the passage of the sixty-five-day period after the filing of the complaint may cure a premature PAGA filing. See Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824, 840–41. Nevertheless, Defendant preserves this defense and contends that the premature filing constitutes a basis for dismissal of Plaintiff's PAGA claims, or alternatively, that the PAGA claims should be deemed to have accrued no earlier than November 19, 2022, thereby limiting any PAGA recovery period.

TWELFTH AFFIRMATIVE DEFENSE

(PAGA Penalty Reduction). To the extent any PAGA penalties are assessed against Defendant, the Court should exercise its discretion under California Labor Code § 2699(e)(2) to reduce any such penalties on the grounds that the maximum statutory penalty would be unjust, arbitrary and oppressive, or confiscatory in light of the totality of the circumstances, including the nature and severity of any violations, the number of affected employees, Defendant's good faith efforts to comply with applicable law, and any corrective measures taken by Defendant.

Plaintiff's Complaint claims approximately $12.2 million in PAGA penalties. Courts routinely exercise their broad discretion under Section 2699(e)(2) to reduce PAGA penalties substantially where the full statutory penalty amount would be disproportionate to the nature of the underlying violations. See, e.g., Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1213–14. Defendant contends that the maximum PAGA penalties sought by Plaintiff would be unjust and disproportionate under the circumstances of this case, particularly given AMA's facially compliant policies, its good faith compliance efforts, and the individualized nature of any alleged violations.

THIRTEENTH AFFIRMATIVE DEFENSE

(Reservation of Rights). Defendant reserves the right to amend this Answer and to assert additional affirmative defenses as they may become known through the course of discovery, investigation, or other proceedings in this action. Discovery in this matter is in its early stages, and Defendant has not yet had an adequate opportunity to conduct a full investigation of Plaintiff's claims. Defendant expressly reserves the right to supplement, amend, or modify its affirmative defenses at any time prior to trial, as permitted by law and by leave of court.

PRAYER FOR RELIEF

WHEREFORE, Defendant Aurelius Media Americas Inc. respectfully prays for judgment as follows:

1. That Plaintiff take nothing by reason of the Complaint, and that each and every cause of action therein be dismissed with prejudice;

2. That judgment be entered in favor of Defendant and against Plaintiff on all causes of action;

3. That Plaintiff's request for class certification be denied;

4. That Plaintiff's PAGA claims be dismissed for lack of standing or, in the alternative, that any PAGA penalties be reduced in the Court's discretion;

5. That Defendant be awarded its costs of suit incurred herein; and

6. For such other and further relief as this Court deems just and proper.

Dated: ___, 2022

CALDERWOOD & HARKNESS LLP

By: ________

Renata Vasquez (SBN XXXXXX) Devon Archer (SBN XXXXXX) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200

Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.

[DRAFT — pending client review and filing. Expected filing date: February 17, 2023, following consolidation of Fuentes and Halloran actions.]

Note: The filed version (Document 23) will be updated to include Derek Halloran and Yesenia Padilla as named plaintiffs following consolidation. Case caption to be updated to reflect consolidated lead case 22STCV38214. SBN numbers to be completed: Vasquez SBN 224578; Archer SBN 301462.

MARISOL FUENTES, individually and on behalf of all others similarly situated,	Case No. 22STCV38214
Plaintiff,	DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT

AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,

Defendants.

CALDERWOOD & HARKNESS LLP CONFIDENTIAL — ATTORNEY WORK PRODUCT — DRAFT
[Working Draft — For Internal Review and Client Comment — Not for Filing]
December 12, 2022
Matter No.: 1017-00004
Prepared by: Devon Archer, with review by Renata Vasquez
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant"), by and through its attorneys of record, Calderwood & Harkness LLP, hereby answers the Complaint filed by Plaintiff Marisol Fuentes ("Plaintiff") on November 1, 2022, and each and every cause of action set forth therein, as follows.
GENERAL DENIAL
Pursuant to California Code of Civil Procedure § 431.30(d), Defendant generally denies each and every allegation contained in the Complaint, including but not limited to each and every allegation contained in each cause of action set forth therein. Defendant further denies that Plaintiff or any putative class member has been damaged in any amount whatsoever, or that Plaintiff or any putative class member is entitled to any relief, whether in the form of damages, restitution, penalties, injunctive relief, declaratory relief, attorneys' fees, costs, or any other form of recovery, as a result of any act or omission by Defendant. Defendant denies that it has violated any provision of the California Labor Code, any applicable Industrial Welfare Commission ("IWC") Wage Order, the California Business and Professions Code, the Private Attorneys General Act ("PAGA"), or any other statute, regulation, or common law duty as alleged in the Complaint or otherwise.
AFFIRMATIVE DEFENSES
Without admitting any of the allegations in the Complaint, and without assuming the burden of proof on any issue as to which Defendant would not otherwise bear such burden at trial or on any dispositive motion, and without waiving any objections, defenses, or rights that may be available to Defendant, including but not limited to the right to amend or supplement this Answer and these affirmative defenses, Defendant asserts the following affirmative defenses to Plaintiff's Complaint:
FIRST AFFIRMATIVE DEFENSE
(Failure to State a Claim).  The Complaint, and each and every cause of action set forth therein, fails to state facts sufficient to constitute a cause of action against Defendant. The Complaint fails to allege with the requisite specificity the factual basis for any of Plaintiff's claims, including but not limited to the particular policies, practices, or conduct that allegedly violated the California Labor Code or any applicable IWC Wage Order. To the extent any cause of action in the Complaint is based upon conclusory allegations, legal conclusions, or allegations that are contradicted by the documents and records referenced therein, such cause of action fails as a matter of law. The Complaint does not adequately plead the elements necessary to state a viable claim for any of the causes of action asserted, including but not limited to Plaintiff's claims for alleged meal period violations, rest period violations, unpaid overtime, unpaid minimum wages, non-compliant wage statements, waiting time penalties, unfair business practices under Business and Professions Code § 17200, or civil penalties under PAGA.
SECOND AFFIRMATIVE DEFENSE
(Statute of Limitations).  Plaintiff's claims, and those of the putative class, are barred in whole or in part by the applicable statutes of limitations and limitations periods, including but not limited to the following:
(a) California Code of Civil Procedure § 338, which imposes a three-year statute of limitations on claims for statutory penalties and other obligations created by statute, including claims for meal period premium pay, rest period premium pay, and wage statement penalties under the California Labor Code;
(b) California Code of Civil Procedure § 340, which imposes a one-year statute of limitations on penalty claims, to the extent any of Plaintiff's claims are properly characterized as penalty claims subject to the one-year period;
(c) California Labor Code § 203, which provides that waiting time penalties are subject to the applicable statute of limitations governing the underlying wage claim;
(d) California Business and Professions Code § 17208, which imposes a four-year statute of limitations on claims brought under the Unfair Competition Law ("UCL"), Business and Professions Code §§ 17200, et seq.; and
(e) California Labor Code § 2699.3, which imposes a one-year statute of limitations on PAGA claims, running from the date of the alleged violation.
The class period as pled in the Complaint runs from November 1, 2018 to the present. To the extent any claims or causes of action asserted in the Complaint — whether on behalf of Plaintiff individually, the putative class, or as PAGA representative claims — are predicated upon conduct, policies, practices, or alleged violations occurring outside the applicable three-year limitations period for statutory penalties, the four-year limitations period for UCL claims, or the one-year limitations period for PAGA claims, such claims are time-barred and must be dismissed. Defendant reserves the right to further refine its statute of limitations defense based on information obtained in discovery, including as to the specific dates of any alleged violations and the applicable accrual dates.
THIRD AFFIRMATIVE DEFENSE
(Compliance with Law).  At all relevant times, Defendant maintained and implemented lawful policies, procedures, and practices regarding meal periods, rest periods, overtime compensation, minimum wage payment, itemized wage statement issuance, final pay timing, and all other aspects of its employment relationship with Plaintiff and the putative class members, in compliance with all applicable provisions of the California Labor Code, the applicable IWC Wage Orders (including, without limitation, Wage Order No. 12-2001, pertaining to the Motion Picture Industry), and all other applicable federal, state, and local laws and regulations.
Specifically, and without limitation:
(a) AMA has at all relevant times maintained facially compliant written policies governing meal periods, rest periods, and timekeeping, as set forth in AMA's Employee Handbook (most recently revised in March 2021). The Employee Handbook provides, among other things, for thirty (30) minute uninterrupted duty-free meal periods for all non-exempt employees working shifts in excess of five (5) hours, and for ten (10) minute paid rest periods for every four (4) hours of work or major fraction thereof, consistent with California Labor Code §§ 226.7, 512, and the applicable provisions of Wage Order No. 12.
(b) AMA utilizes the NovaPay Solutions "TimeTrack Pro" electronic timekeeping system across all seven (7) of its California production facilities. The TimeTrack Pro system includes built-in mechanisms for employees to report missed, shortened, or interrupted meal periods, and automatically generates premium pay entries when employees record meal periods of fewer than thirty (30) minutes. The system also captures actual clock-in and clock-out times for all non-exempt employees and calculates overtime in accordance with California's daily and weekly overtime requirements under Labor Code § 510.
(c) AMA's written meal and rest period policies were distributed to all non-exempt employees, including Plaintiff, and employees were required to acknowledge receipt of such policies. AMA conducted regular training for supervisors and production managers regarding their obligation to provide, authorize, and permit meal and rest periods in compliance with California law.
Defendant's policies and practices were designed to, and did, comply with all applicable legal requirements. Any alleged violation of law, to the extent one occurred, was not the result of any policy, practice, or directive of AMA, but rather was the result of individual employees' voluntary choices, individual supervisor error, or other circumstances beyond AMA's control.
FOURTH AFFIRMATIVE DEFENSE
(Good Faith).  At all relevant times, Defendant acted in good faith and with a reasonable, good faith belief that its policies, practices, and compensation procedures complied with all applicable provisions of the California Labor Code, the applicable IWC Wage Orders, and all other applicable laws and regulations. Defendant's good faith compliance with applicable law constitutes a complete defense, or a basis for reduction of penalties, with respect to certain penalty claims asserted in the Complaint, including but not limited to:
(a) PAGA penalties, for which the Court has discretion to reduce penalties where the employer's violation was not willful and the employer acted in good faith, pursuant to California Labor Code § 2699(e)(2); and
(b) Waiting time penalties under California Labor Code § 203, for which a good faith dispute as to the amount of wages owed provides a complete defense. See Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7.
AMA consulted with outside employment counsel regarding its meal and rest period policies, its timekeeping system configuration, and its wage statement format, and relied in good faith upon the advice received. AMA's policies and practices were implemented with the intent and design of complying fully with California law, and any inadvertent errors or shortcomings, to the extent they occurred, were not the product of willful disregard for legal obligations.
FIFTH AFFIRMATIVE DEFENSE
(Waiver / Estoppel).  Plaintiff's claims, and those of the putative class, are barred in whole or in part by the doctrines of waiver, estoppel, and laches, including but not limited to the voluntary waiver by Plaintiff and putative class members of meal periods and rest periods that were authorized, permitted, and made available by Defendant.
Under the California Supreme Court's holding in Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, an employer's obligation with respect to meal periods is to provide such breaks — that is, to relieve the employee of all duties and relinquish control over the employee's activities during the break period — not to ensure that every employee actually takes each break in its entirety. The same principle applies with respect to rest periods, which an employer must authorize and permit but need not police or compel employees to take. See id. at 1040–41.
To the extent Plaintiff or any putative class member voluntarily chose to forgo, shorten, or work through meal or rest periods that AMA had provided, authorized, and permitted, AMA is not liable for any resulting claims. The doctrines of waiver and estoppel preclude Plaintiff and the putative class from recovering for the voluntary relinquishment of break periods that were made available to them in compliance with law.
Additionally, to the extent Plaintiff or any putative class member unreasonably delayed in asserting claims or complaints regarding alleged meal period, rest period, or wage violations, the doctrine of laches bars or limits such claims. Plaintiff's delay in bringing the claims alleged in the Complaint, to the extent such delay caused prejudice to Defendant, independently supports application of the laches doctrine.
SIXTH AFFIRMATIVE DEFENSE
(Offset and Recoupment).  To the extent Plaintiff or any putative class member has already received payment for meal period premium pay, rest period premium pay, overtime compensation, or any other form of wages or compensation relating to the claims alleged in the Complaint, any recovery to which Plaintiff or any class member may ultimately be found to be entitled is subject to offset and recoupment for amounts already paid. Defendant is entitled to credit for all wages, premiums, penalties, and other compensation previously paid to Plaintiff and the putative class members, such that no double recovery may be obtained.
AMA's records reflect that premium pay was generated and paid through the TimeTrack Pro system in certain instances where employees recorded meal periods of fewer than thirty (30) minutes. Defendant is entitled to offset any judgment or award against such prior payments, as well as against any other payments made to Plaintiff or putative class members that relate to the claims asserted in the Complaint.
SEVENTH AFFIRMATIVE DEFENSE
(De Minimis).  Plaintiff's claims for alleged off-the-clock work, to the extent they involve trivial, irregular, or de minimis amounts of time that are administratively difficult to record, are not compensable under the de minimis doctrine.
Defendant acknowledges that the California Supreme Court in Troester v. Starbucks Corp. (2018) 5 Cal.5th 829, held that the federal de minimis doctrine does not apply in the same manner under California law, and that California's wage and hour statutes generally require compensation for all hours worked. However, the Troester court declined to foreclose entirely the possibility that a de minimis principle might apply in limited circumstances under California law, noting that "some amount of time will be so minute or irregular that it is unreasonable to require compensation." Id. at 847–48. The Court explicitly left open the question of "whether there are circumstances where compensable time is so minute or irregular that it is unreasonable to expect the time to be recorded." Id. at 848.
To the extent Plaintiff's claims encompass truly trivial time increments — such as the time required to boot up computers, log into systems, or perform similarly brief pre-shift or post-shift tasks — the de minimis doctrine, or an analogous principle of reasonableness, precludes recovery. While Defendant acknowledges that the alleged off-the-clock time as pled in the Complaint (approximately thirty to forty-five minutes pre-shift and fifteen to thirty minutes post-shift) may be too substantial for this defense to apply broadly, Defendant preserves this defense for application to any truly trivial time increments that may be identified through discovery. This defense is particularly relevant to the extent individual class members' claims involve minimal or sporadic time that was not systematically required by AMA's policies or practices.
EIGHTH AFFIRMATIVE DEFENSE
(Lack of Standing — UCL Claim).  Plaintiff lacks standing to bring her Third Cause of Action under the Unfair Competition Law, California Business and Professions Code § 17200, et seq., because she has not suffered an "injury in fact" and has not "lost money or property as a result of the unfair competition," as required by Proposition 64 (approved by California voters in November 2004) and codified in Business and Professions Code § 17204. Under the standing requirements imposed by Proposition 64, a private plaintiff may bring a UCL claim only if she demonstrates that she has suffered actual injury and that such injury was caused by the defendant's allegedly unfair business practice. See Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.
To the extent Plaintiff's UCL cause of action is predicated solely upon the same alleged wage losses and Labor Code violations underlying her other causes of action, the UCL claim is duplicative and fails to allege an independent basis for standing. If Plaintiff has not suffered actual injury as a result of the alleged Labor Code violations — an allegation that Defendant denies — then she likewise lacks standing to pursue a derivative UCL claim. Moreover, to the extent the UCL claim seeks only the same relief available under the Labor Code causes of action, it is unnecessary and should be dismissed as superfluous.
NINTH AFFIRMATIVE DEFENSE
(No Class Certification).  Plaintiff's claims are not appropriate for class treatment under California Code of Civil Procedure § 382 or any other provision of law. Defendant will oppose any motion for class certification on the grounds that Plaintiff has not and cannot satisfy the requirements for class certification, including but not limited to:
(a) Predominance. Common questions of law and fact do not predominate over individual questions. The resolution of the claims alleged in the Complaint will require individualized inquiries into each putative class member's specific job duties, work schedules, meal and rest period practices, supervisory interactions, voluntary break waivers, and compensation history. These individualized issues overwhelm any common questions and render class treatment inappropriate.
(b) Typicality. The named Plaintiff is not typical of the putative class. Plaintiff's individual employment history, job classification, facility assignment, production unit, supervisory chain, and meal and rest period experiences are not representative of the experiences of the approximately 1,850 non-exempt, hourly employees across AMA's seven California production facilities and fourteen distinct production units who comprise the putative class.
(c) Adequacy. The named Plaintiff is not an adequate class representative. Plaintiff's individual circumstances, interests, and potential defenses may be antagonistic to, or divergent from, those of other putative class members, rendering her an inadequate representative.
(d) Superiority. A class action is not a superior method of adjudicating the claims alleged in the Complaint. Given the highly individualized nature of the factual inquiries required, alternative methods of adjudication — including individual claims, representative PAGA proceedings, or other mechanisms — are superior to class treatment.
The putative class of approximately 1,850 non-exempt, hourly employees spans seven (7) California production facilities and fourteen (14) distinct production units, each operating under Wage Order No. 12 but with significant variation in scheduling practices, production types, crew configurations, and supervisory discretion. See Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 (recognizing that individualized issues regarding whether employer provided breaks can defeat class certification). These variations preclude a finding that common issues predominate or that class treatment is manageable or superior.
TENTH AFFIRMATIVE DEFENSE
(Individual Variation).  The claims of the putative class members are subject to material individual variations in working conditions, schedules, job duties, supervisory structures, and meal and rest break practices that preclude class-wide adjudication or any class-wide presumption of liability. The putative class encompasses non-exempt, hourly employees spread across AMA's seven California production facilities, each of which operates under distinct conditions:
1.  8500 Sunset Blvd., Suite 1400, West Hollywood, CA 90069 — Headquarters and post-production facility;
2.  4024 Penmark Strategy Partners Avenue, Studio City, CA 91604 — Stage A and Stage B, unscripted programming;
3.  15301 Ventura Blvd., Suite 300, Sherman Oaks, CA 91403 — Digital content production;
4.  3800 W. Alameda Ave., Burbank, CA 91505 — Live events and field production;
5.  1438 N. Gower Street, Hollywood, CA 90028 — Scripted development;
6.  2120 Colorado Avenue, Santa Monica, CA 90404 — E-commerce studio; and
7.  888 N. Sepulveda Blvd., El Segundo, CA 90245 — Post-production annex.
In addition to these seven facilities, AMA operates fourteen (14) distinct production units, each functioning under Wage Order No. 12 but with materially varying schedules, production types (studio-based production, field-based production, live events, post-production, and digital content), crew sizes, call time structures, and supervisory practices. The determination of liability on Plaintiff's meal period, rest period, overtime, and off-the-clock claims will necessarily turn on the specific working conditions, supervisory decisions, and individual experiences of each class member within his or her particular facility and production unit. These individualized inquiries cannot be resolved on a class-wide basis and independently preclude class certification.
ELEVENTH AFFIRMATIVE DEFENSE
(No PAGA Standing — Failure to Exhaust Administrative Requirements).  To the extent Plaintiff asserts claims under the Private Attorneys General Act of 2004, California Labor Code §§ 2698–2699.8 ("PAGA"), Plaintiff's PAGA claims are barred because Plaintiff failed to comply with the mandatory pre-suit notice and exhaustion requirements of California Labor Code § 2699.3.
California Labor Code § 2699.3(a)(2)(A) requires that an aggrieved employee provide written notice to the Labor and Workforce Development Agency ("LWDA") and to the employer of the specific provisions of the Labor Code alleged to have been violated, including the facts and theories to support the alleged violation. Upon providing such notice, the aggrieved employee must wait sixty-five (65) calendar days before commencing a civil action, unless the LWDA notifies the employee and the employer within that period that it intends to investigate the alleged violation.
The record reflects that Plaintiff filed her PAGA notice with the LWDA on September 15, 2022. The sixty-five (65) day waiting period therefore would not have expired until November 19, 2022. Plaintiff, however, filed the instant Complaint on November 1, 2022 — eighteen (18) days before the expiration of the mandatory sixty-five (65) day waiting period. This premature filing is a jurisdictional defect that deprives Plaintiff of standing to pursue PAGA claims in this action.
Defendant acknowledges that certain courts have held that the passage of the sixty-five-day period after the filing of the complaint may cure a premature PAGA filing. See Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824, 840–41. Nevertheless, Defendant preserves this defense and contends that the premature filing constitutes a basis for dismissal of Plaintiff's PAGA claims, or alternatively, that the PAGA claims should be deemed to have accrued no earlier than November 19, 2022, thereby limiting any PAGA recovery period.
TWELFTH AFFIRMATIVE DEFENSE
(PAGA Penalty Reduction).  To the extent any PAGA penalties are assessed against Defendant, the Court should exercise its discretion under California Labor Code § 2699(e)(2) to reduce any such penalties on the grounds that the maximum statutory penalty would be unjust, arbitrary and oppressive, or confiscatory in light of the totality of the circumstances, including the nature and severity of any violations, the number of affected employees, Defendant's good faith efforts to comply with applicable law, and any corrective measures taken by Defendant.
Plaintiff's Complaint claims approximately $12.2 million in PAGA penalties. Courts routinely exercise their broad discretion under Section 2699(e)(2) to reduce PAGA penalties substantially where the full statutory penalty amount would be disproportionate to the nature of the underlying violations. See, e.g., Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1213–14. Defendant contends that the maximum PAGA penalties sought by Plaintiff would be unjust and disproportionate under the circumstances of this case, particularly given AMA's facially compliant policies, its good faith compliance efforts, and the individualized nature of any alleged violations.
THIRTEENTH AFFIRMATIVE DEFENSE
(Reservation of Rights).  Defendant reserves the right to amend this Answer and to assert additional affirmative defenses as they may become known through the course of discovery, investigation, or other proceedings in this action. Discovery in this matter is in its early stages, and Defendant has not yet had an adequate opportunity to conduct a full investigation of Plaintiff's claims. Defendant expressly reserves the right to supplement, amend, or modify its affirmative defenses at any time prior to trial, as permitted by law and by leave of court.
PRAYER FOR RELIEF
WHEREFORE, Defendant Aurelius Media Americas Inc. respectfully prays for judgment as follows:
1.  That Plaintiff take nothing by reason of the Complaint, and that each and every cause of action therein be dismissed with prejudice;
2.  That judgment be entered in favor of Defendant and against Plaintiff on all causes of action;
3.  That Plaintiff's request for class certification be denied;
4.  That Plaintiff's PAGA claims be dismissed for lack of standing or, in the alternative, that any PAGA penalties be reduced in the Court's discretion;
5.  That Defendant be awarded its costs of suit incurred herein; and
6.  For such other and further relief as this Court deems just and proper.
Dated: ___, 2022
CALDERWOOD & HARKNESS LLP
By: ________
Renata Vasquez (SBN XXXXXX) Devon Archer (SBN XXXXXX) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200
Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.
[DRAFT — pending client review and filing. Expected filing date: February 17, 2023, following consolidation of Fuentes and Halloran actions.]
Note: The filed version (Document 23) will be updated to include Derek Halloran and Yesenia Padilla as named plaintiffs following consolidation. Case caption to be updated to reflect consolidated lead case 22STCV38214. SBN numbers to be completed: Vasquez SBN 224578; Archer SBN 301462.
MARISOL FUENTES, individually and on behalf of all others similarly situated, | Case No. 22STCV38214
Plaintiff, | DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT
v.
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,
Defendants.