SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
DECLARATION OF DEVON ARCHER IN SUPPORT OF MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
Filed in Support of Defendant Aurelius Media Americas Inc.'s Joinder in / Non-Opposition to Motion for Final Approval of Class Action Settlement
Date: February 2, 2024 Time: 10:00 a.m. Dept.: 34
DECLARATION OF DEVON ARCHER
I, Devon Archer, declare as follows:
1. My name is Devon Archer. I am a licensed attorney in the State of California, State Bar Number 301462, and a Senior Associate at the law firm of Calderwood & Harkness LLP, located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017. I am an attorney of record for Defendant and Settling Defendant Aurelius Media Americas Inc. ("AMA") in the above-captioned action. I have served as Lead Associate on this matter since the engagement opened on November 1, 2022, under the direction of Responsible Partner Renata Vasquez (Calderwood & Harkness Matter No. 1017-00004). I make this declaration based upon my personal knowledge, except where otherwise indicated, and if called as a witness, I could and would competently testify to the matters stated herein. I submit this declaration in support of AMA's joinder in, and non-opposition to, Plaintiffs' Motion for Final Approval of the Class Action Settlement.
2. On September 15, 2023, the parties executed the Class Action Settlement Agreement and Release (the "Settlement Agreement"). The Settlement Agreement was reached after two full-day mediation sessions conducted on August 25, 2023 and September 8, 2023, before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. The settlement was the product of extensive, hard-fought litigation spanning nearly a year. During the course of this litigation, the parties engaged in a comprehensive exchange of discovery. AMA produced 147,832 documents comprising approximately 1.2 million pages of payroll records, timekeeping data, employment policies, internal communications, and related materials. Plaintiffs, in turn, produced 3,412 documents. The parties conducted eighteen fact and expert depositions — eleven noticed and taken by Plaintiffs and seven noticed and taken by AMA. Expert reports were exchanged by both sides, including reports addressing the operation of AMA's timekeeping system, statistical analysis of meal period compliance data, and damages modeling. In addition, the parties fully briefed and argued Plaintiffs' Motion for Class Certification, which the Court heard on July 28, 2023. On August 11, 2023, the Court granted partial class certification, certifying the first meal period automatic deduction claim, the derivative wage statement claim under California Labor Code section 226, and the Unfair Competition Law claim under California Business and Professions Code section 17200. The Court declined to certify the second meal period claim and the rest period claims. The settlement was thus negotiated against the backdrop of a clear judicial assessment of the merits and scope of the class claims, providing all parties with a well-informed basis for evaluating the reasonableness of the proposed resolution.
3. I am familiar with the material terms of the Settlement Agreement and summarize them here for the Court's convenience:
(a) Gross Settlement Amount. The Gross Settlement Amount ("GSA") is Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000.00), which is fully non-reversionary. Under no circumstances will any portion of the GSA revert to AMA.
(b) Settlement Class Definition. The Settlement Class is defined as all current and former non-exempt, hourly employees of AMA who worked in California at any time during the period from November 1, 2018 through October 31, 2023 (the "Class Period"), and who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system. The estimated size of the Settlement Class is approximately 1,850 individuals.
(c) Allocation of the GSA. The GSA is allocated as follows:
(i) Attorneys' Fees: Class Counsel's attorneys' fees in the amount of thirty-three and one-third percent (33.33%) of the GSA, totaling Four Million Nine Hundred Sixteen Thousand One Hundred Seventy-Five Dollars ($4,916,175.00), subject to Court approval;
(ii) Litigation Costs: Reimbursement of Class Counsel's reasonable litigation costs in the amount of Four Hundred Twelve Thousand Three Hundred Dollars ($412,300.00), subject to Court approval;
(iii) Service Awards: Service awards to the named Plaintiffs in the total amount of Thirty-Five Thousand Dollars ($35,000.00), allocated as follows: Fifteen Thousand Dollars ($15,000.00) to Marisol Fuentes, Ten Thousand Dollars ($10,000.00) to Derek Halloran, and Ten Thousand Dollars ($10,000.00) to Yesenia Padilla, subject to Court approval;
(iv) Settlement Administration Costs: Settlement administration fees and costs to Meridian Settlement Services LLC in the amount of Three Hundred Eighty-Five Thousand Dollars ($385,000.00);
(v) PAGA Payment: Seven Hundred Fifty Thousand Dollars ($750,000.00) allocated to the resolution of claims under the Private Attorneys General Act of 2004 ("PAGA"), Cal. Lab. Code §§ 2698 et seq., of which seventy-five percent (75%), or Five Hundred Sixty-Two Thousand Five Hundred Dollars ($562,500.00), shall be paid to the California Labor and Workforce Development Agency ("LWDA"), and twenty-five percent (25%), or One Hundred Eighty-Seven Thousand Five Hundred Dollars ($187,500.00), shall be distributed to aggrieved employees; and
(vi) Net Settlement Fund: The remaining balance, estimated at Eight Million Two Hundred Fifty-One Thousand Five Hundred Twenty-Five Dollars ($8,251,525.00) (the "Net Settlement Fund" or "NSF"), shall be distributed to participating Settlement Class Members who do not opt out of the settlement.
(d) Distribution Formula. Individual settlement payments from the NSF shall be calculated using a weighted formula based on each participating class member's employment data during the Class Period: sixty percent (60%) of each individual's pro rata share shall be based on the number of weeks worked during the Class Period, and forty percent (40%) shall be based on recorded overtime hours during the Class Period.
(e) Release. In exchange for the settlement consideration, Settlement Class Members who do not timely opt out shall provide a broad release of all class, PAGA, and individual wage-and-hour claims arising from or related to the operative facts alleged in the Consolidated Complaint, including both the certified and non-certified claims. The scope and specific terms of the release are set forth in Section VIII of the Settlement Agreement.
4. On September 22, 2023, the parties filed a joint Motion for Preliminary Approval of the Class Action Settlement. On October 18, 2023, the Court (Hon. Raymond Escobedo, Dept. 34) entered the Order Granting Preliminary Approval of Class Action Settlement (the "Preliminary Approval Order"). In the Preliminary Approval Order, the Court: (a) provisionally certified the Settlement Class for settlement purposes; (b) preliminarily approved the Settlement Agreement as falling within the range of possible approval; (c) approved the proposed class notice plan, consisting of both a long-form notice and a summary postcard notice; (d) appointed Meridian Settlement Services LLC ("Meridian"), with Angela Truong as the Principal Contact (1600 E. Fourth Street, Suite 240, Santa Ana, California 92701), as the claims administrator; (e) set the Final Approval Hearing for February 2, 2024, at 10:00 a.m. in Department 34; and (f) established the deadline for class members to submit exclusion requests (opt-outs) and objections as January 2, 2024, which is sixty-one (61) days after the scheduled mailing of class notice.
5. Following entry of the Preliminary Approval Order, AMA cooperated fully and in good faith with Meridian Settlement Services in the administration of class notice. In accordance with Section VI.B of the Settlement Agreement and the directives of the Preliminary Approval Order, AMA provided Meridian with the class list, which included the following information for each putative Settlement Class Member: last known full name, last known mailing address, Social Security number, dates of employment with AMA during the Class Period, total number of weeks worked during the Class Period, and total recorded overtime hours during the Class Period. This data was derived from payroll and timekeeping records maintained by NovaPay Solutions Inc. ("NovaPay"), AMA's payroll processor and the provider of the TimeTrack Pro timekeeping system utilized at AMA's California production facilities. NovaPay is located at 2200 Powell Street, Suite 600, Emeryville, California 94608. The key custodian of AMA's payroll and timekeeping data at NovaPay is Marcus Yee, Director of Client Data Services. AMA's Payroll Manager, Karen Fong, coordinated directly with both Meridian and NovaPay to ensure the accuracy and integrity of the class data provided to Meridian. Additionally, AMA's Senior Vice President of Human Resources, Lorraine Okafor, independently verified the completeness of the class list by cross-referencing it against AMA's internal human resources records to confirm that all individuals meeting the Settlement Class definition were included. I am informed by Meridian, and I refer the Court to the Declaration of Angela Truong filed concurrently herewith for additional details, that class notice was mailed by first-class United States mail on November 3, 2023, which was within the timeline specified by the Preliminary Approval Order. I am further informed by Meridian that a total of 1,843 notices were mailed to Settlement Class Members, that 7 notices were initially returned by the United States Postal Service as undeliverable, and that Meridian performed skip-tracing procedures and re-mailed those 7 notices to updated addresses. I am also informed that the settlement website established by Meridian for the purposes of this settlement received a total of 2,847 visits during the notice period.
6. The deadline for Settlement Class Members to submit exclusion requests (opt-outs) or file objections to the settlement was January 2, 2024. I am informed by Meridian that twenty-three (23) valid and timely requests for exclusion were received. This represents an opt-out rate of approximately 1.24% of the approximately 1,850-person Settlement Class. This opt-out rate is well below the five percent (5%) threshold — corresponding to approximately 93 individuals — that would trigger AMA's contractual right to void the settlement under Section X.C of the Settlement Agreement. AMA does not exercise its right to void the settlement and hereby confirms to the Court that the settlement remains in full force and effect.
I am further informed by Meridian that four (4) objections to the settlement were received from the following individuals: Carlos Vega, Rachel Kimura, Samuel Torres, and Dawn Prescott. To avoid any potential confusion, I note that objector Dawn Prescott bears no relation to Dwayne Prescott, who serves as a Vice President at AMA. AMA and Class Counsel have filed a joint Response to Class Member Objections, filed concurrently herewith, which addresses each of the four objections on its merits. In AMA's view, none of the objections presents a material obstacle to final approval of the settlement.
7. I am informed by Meridian that a total of 1,262 valid and timely claims were submitted by Settlement Class Members during the claims period. This represents a claims rate of approximately 68.2% (1,262 of 1,850 class members). This claims rate is well above the average claims rate in comparable California wage-and-hour class action settlements, which typically range from approximately 20% to 50%, and reflects the effectiveness of the class notice program and the overall fairness and desirability of the settlement to the class. Meridian has confirmed to me that it has received and verified sufficient data from AMA to calculate individual settlement payments for all participating class members under the distribution formula set forth in the Settlement Agreement — that is, sixty percent (60%) based on weeks worked during the Class Period and forty percent (40%) based on recorded overtime hours during the Class Period. Meridian anticipates that it will be able to process and distribute settlement payments within the timeframe specified in the Settlement Agreement following entry of the Final Approval Order and the expiration of any applicable appeal period.
8. AMA is prepared to fund its share of the Gross Settlement Amount within fourteen (14) calendar days of the Court's entry of the Final Approval Order, as required by Section XI.A of the Settlement Agreement. The settlement will be funded from the following two sources:
(a) Insurance Contribution. AMA's employment practices liability ("EPL") insurance carrier, Pemberton Mutual Assurance Co. ("Pemberton"), under Policy No. PMA-EPL-2022-00837, has authorized a contribution of Nine Million Two Hundred Fifty Thousand Dollars ($9,250,000.00) toward the GSA. This authorization was confirmed in a letter dated September 13, 2023 from Pemberton's coverage counsel, a copy of which is maintained on file with AMA and Calderwood & Harkness LLP. Pemberton is prepared to wire its authorized contribution to the escrow account maintained by Meridian Settlement Services upon entry of the Final Approval Order.
(b) AMA Self-Funded Contribution. AMA will self-fund the remaining Five Million Five Hundred Thousand Dollars ($5,500,000.00) of the GSA ($14,750,000.00 minus $9,250,000.00). AMA is likewise prepared to wire its self-funded portion to the Meridian Settlement Services escrow account upon entry of the Final Approval Order.
AMA's Chief Financial Officer, Malcolm Dunmore (an officer of Aurelius Global Media Group, AMA's parent company), and AMA's President, Jonathan Mercer, have each confirmed to me that the full funding for AMA's self-funded share of the settlement has been approved and is available for disbursement. There are no contingencies, conditions, or corporate approvals remaining that would delay or prevent AMA from meeting its funding obligations under the Settlement Agreement.
9. AMA confirms that it has complied with all of its obligations under the Settlement Agreement and the Preliminary Approval Order from the date of execution of the Settlement Agreement through the date of this declaration. Specifically, AMA confirms the following:
(a) AMA timely provided all required class data to Meridian Settlement Services, including the class list and associated employment, payroll, and timekeeping data, in the format and within the timeframe specified by the Preliminary Approval Order and the Settlement Agreement;
(b) AMA has cooperated fully with the claims administration process, responding promptly to all inquiries from Meridian and making AMA personnel available to verify data and resolve discrepancies as needed;
(c) AMA has not interfered, directly or indirectly, with the notice process, the claims administration process, or the rights of Settlement Class Members to submit claims, opt out of the settlement, or file objections;
(d) AMA has not implemented any adverse changes to its employment policies, timekeeping practices, or compensation structures that were designed to undermine or circumvent the settlement or to discourage class member participation; and
(e) AMA has otherwise complied with all directives of the Court and all obligations of the Settlement Agreement applicable to AMA during the period between preliminary and final approval.
AMA further confirms, consistent with Section XIV of the Settlement Agreement, that the settlement does not constitute an admission of liability, wrongdoing, or fault by AMA with respect to any of the claims alleged in the Consolidated Complaint or otherwise. AMA continues to deny all allegations of wrongdoing in the Consolidated Complaint and entered into the Settlement Agreement solely for the purpose of resolving the disputed claims and avoiding the expense, burden, and uncertainty of continued litigation.
10. While the Settlement Agreement does not require injunctive or prospective relief as a component of the settlement, AMA has voluntarily implemented the following corrective measures since the filing of this action, which I believe are relevant to the Court's assessment of the fairness and adequacy of the settlement:
(a) In December 2022, shortly after this action was filed, AMA corrected the automatic meal period deduction threshold in the NovaPay Solutions TimeTrack Pro timekeeping system from six (6) hours to five (5) hours, bringing the auto-deduction threshold into compliance with Industrial Welfare Commission Wage Order 12 and California Labor Code section 512, which require that employers provide a meal period of not less than thirty (30) minutes to employees who work more than five (5) hours in a workday;
(b) In December 2022, AMA activated the "Missed Meal Attestation" feature within the TimeTrack Pro system at Facility 2 (4024 Penmark Strategy Partners Avenue, Studio City, California), Facility 4 (3800 W. Alameda Avenue, Burbank, California), and Facility 7 (888 N. Sepulveda Boulevard, El Segundo, California). These three facilities were the only AMA California production facilities at which the Missed Meal Attestation feature had not previously been activated. The Missed Meal Attestation feature prompts employees to affirmatively confirm at the end of each shift whether they were provided with all required meal periods, and flags any reported missed meal periods for review by facility management and payroll; and
(c) As a result of the corrective actions described in subparagraphs (a) and (b) above, the Missed Meal Attestation feature is now operational at all seven of AMA's California production facilities.
These corrective measures, while voluntary and not required by the Settlement Agreement, demonstrate AMA's good faith commitment to compliance with California wage-and-hour laws and its intention to prevent the recurrence of the timekeeping system issues that gave rise to the claims in this action. AMA believes that the implementation of these measures provides an additional, practical benefit to current AMA employees that goes beyond the monetary relief provided by the settlement.
11. To the best of my knowledge, information, and belief, formed after reasonable inquiry, no Settlement Class Member, objector, or other interested party has indicated an intention to appeal the Final Approval Order if it is entered by this Court. The twenty-three (23) opt-outs and four (4) objections received during the notice period are modest in number relative to the size of the Settlement Class. The low opt-out rate and limited number of objections do not suggest any organized opposition to the settlement and, in AMA's view, affirmatively support the conclusion that the settlement is viewed by the overwhelming majority of Settlement Class Members as fair and reasonable.
12. In light of the foregoing, AMA respectfully joins in the request for final approval of the Class Action Settlement. AMA confirms its readiness and ability to fund the Gross Settlement Amount in full upon entry of the Final Approval Order and Judgment, in accordance with the terms and timeline set forth in the Settlement Agreement. It is AMA's position that the settlement is fair, adequate, and reasonable, was the product of arm's-length negotiations conducted by experienced counsel and facilitated by a well-respected neutral mediator, and is in the best interests of the Settlement Class. AMA respectfully requests that the Court grant final approval of the settlement and enter Judgment in accordance with the terms of the Settlement Agreement.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on January 22, 2024, at Los Angeles, California.
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Devon Archer (SBN 301462) Senior Associate CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Attorney for Defendant Aurelius Media Americas Inc.
MARISOL FUENTES, DEREK HALLORAN, and YESENIA PADILLA, individually and on behalf of all others similarly situated,
(Consolidated with Case No. 22STCV39501)
Plaintiffs,
Assigned for All Purposes to:
v.
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,
Defendants.