1017-00004 · Entities. Aurelius Global Media Group · Settlement Approval

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES — CENTRAL DISTRICT

MARISOL FUENTES, DEREK HALLORAN, and YESENIA PADILLA, individually and on behalf of all others similarly situated,

Plaintiffs,

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

Defendants.

DECLARATION OF RENATA VASQUEZ IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT

Filed: September 22, 2023

I, Renata Vasquez, declare as follows:

1. I am a partner at the law firm of Calderwood & Harkness LLP, located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017. I am an active member of the State Bar of California, Bar Number 224578, and have been admitted to practice law in the State of California since 2005. I serve as the responsible partner and counsel of record for Defendant Aurelius Media Americas Inc. ("AMA") in the above-captioned consolidated class action. I have over eighteen (18) years of experience in the defense of employment class actions and representative actions under the Private Attorneys General Act of 2004 ("PAGA") in the state and federal courts of California. Over the course of my career, I have handled more than forty (40) such matters, including complex wage-and-hour class actions involving meal and rest period claims, off-the-clock work claims, overtime and minimum wage claims, and derivative wage statement and waiting time penalty claims. By reason of my extensive involvement in this litigation from its inception, I have personal knowledge of the facts set forth in this declaration and, if called upon to do so, could and would competently testify thereto.

2. Calderwood & Harkness LLP was retained by AMA to represent it in this action effective November 1, 2022, under our internal matter reference C&H Matter No. 1017-00004. AMA is a corporation organized and existing under the laws of the State of Delaware and is qualified to transact business in the State of California. AMA maintains its principal office at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales, with its registered headquarters located at 34 Kingsway, London WC2B 6EX, United Kingdom. AMA is a media production and entertainment company that, at relevant times during the class period, employed approximately 3,200 employees in the United States, of whom approximately 2,400 were based in the State of California. AMA's California operations encompass seven (7) production facilities situated across Los Angeles County, Ventura County, and Orange County, and AMA operates a total of fourteen (14) distinct show units that produce unscripted and scripted programming for various broadcast and streaming platforms. The scope and diversity of AMA's California operations are directly relevant to the issues addressed in this declaration, including the analysis of commonality, the range of damages estimates, and the ultimate fairness and reasonableness of the proposed settlement.

3. The procedural history of this litigation is as follows. On November 1, 2022, named Plaintiff Marisol Fuentes filed a putative class action complaint in this Court, assigned Case No. 22STCV38214, alleging systematic wage-and-hour violations on behalf of a putative class of approximately 1,850 current and former non-exempt, hourly employees of AMA who worked in the State of California. On November 18, 2022, a related complaint was filed by Derek Halloran under Case No. 22STCV39501, asserting substantially identical claims against AMA and arising from the same operative facts. On February 3, 2023, this Court entered an Order consolidating the Fuentes and Halloran actions, with Case No. 22STCV38214 designated as the lead case and the consolidated matter assigned to the Honorable Raymond Escobedo, Department 34, for all purposes. Thereafter, Yesenia Padilla was added as a named plaintiff in the consolidated action. On February 17, 2023, AMA filed its Answer and Affirmative Defenses to the Consolidated Complaint, denying liability and asserting, among other things, affirmative defenses based on individual variations in working conditions, compliance with applicable law, good faith, and the absence of a uniform policy or practice giving rise to classwide liability.

It is also relevant to the Court's consideration that a PAGA notice was filed with the Labor and Workforce Development Agency ("LWDA") on September 15, 2022, pursuant to California Labor Code section 2699.3(a). The sixty-five (65) day waiting period prescribed by statute expired on November 14, 2022, and the LWDA took no action in response to the notice during that period or at any time thereafter, thereby permitting the PAGA representative claims to proceed in this Court.

Plaintiffs' claims in the Consolidated Complaint are asserted under the following provisions of California law: California Labor Code sections 226.7 (meal and rest period premiums), 510 and 512 (meal period requirements), 1194, 1197, and 1197.1 (minimum wage), 1198 (maximum hours), 226 (wage statement requirements), and 201 through 203 (waiting time penalties); California Business and Professions Code section 17200 et seq. (the Unfair Competition Law or "UCL"); and PAGA representative claims under California Labor Code section 2698 et seq. The gravamen of Plaintiffs' claims relates primarily to AMA's use of an automatic meal period deduction feature in the NovaPay Solutions TimeTrack Pro timekeeping system, which Plaintiffs allege systematically deducted thirty (30) minutes from employees' daily work time for meal periods regardless of whether a compliant, duty-free meal period was actually provided. Plaintiffs further allege that AMA failed to provide compliant meal and rest periods across its California production facilities and show units, and that AMA's employees were required to perform compensable work off the clock before and after their scheduled shifts.

4. The parties conducted extensive discovery over the course of approximately seven (7) months prior to the mediation sessions that culminated in the settlement now before the Court for preliminary approval. The breadth and depth of the discovery in this matter were substantial and provided both sides with a thorough factual record upon which to evaluate the strengths and weaknesses of their respective positions, assess the range of potential damages, and engage in informed, arm's-length settlement negotiations.

Written discovery. On the side of written discovery propounded by Plaintiffs, AMA responded to Plaintiffs' First Set of Form Interrogatories (Employment Law), two (2) sets of Special Interrogatories encompassing Special Interrogatory Nos. 1 through 78, and two (2) sets of Requests for Production of Documents encompassing Request Nos. 1 through 62. AMA also served supplemental responses to Requests for Production Nos. 14, 27, 33, and 41, which pertained to, among other things, the configuration and settings of the NovaPay Solutions TimeTrack Pro system, the activation history of the Missed Meal Attestation feature, the meal period waiver forms utilized at each of AMA's California facilities, and AMA's internal audit of timekeeping compliance conducted in the second quarter of 2022. AMA, in turn, propounded its own written discovery to each of the three named plaintiffs. Specifically, AMA served Form Interrogatories (Employment Law), Special Interrogatories Nos. 1 through 35, and Requests for Production of Documents Nos. 1 through 20 upon each of Marisol Fuentes, Derek Halloran, and Yesenia Padilla, and all three named plaintiffs served timely responses thereto.

Electronically Stored Information and Document Production. On January 13, 2023, the parties entered into a stipulation governing the production of electronically stored information (the "ESI Protocol Stipulation"), which was filed with this Court. The ESI Protocol Stipulation established the agreed-upon format for production of electronically stored information, the search methodology to be employed (including agreed-upon search terms and date ranges), de-duplication protocols, privilege logging requirements, and clawback provisions pursuant to Federal Rule of Evidence 502(d) by analogy. In accordance with the ESI Protocol Stipulation and Plaintiffs' Requests for Production, AMA produced a total of 147,832 documents, comprising approximately 1.2 million pages, from seven (7) identified custodians. The identified custodians were: Lorraine Okafor, Senior Vice President of Human Resources; Gregory Tanaka, Vice President of Legal and Compliance; Marcus Yee, a third-party custodian employed by NovaPay Solutions Inc. who was responsible for the implementation and configuration of the TimeTrack Pro system for AMA's account; Jonathan Mercer, President of AMA; Celine Arroyo, Director of Production Operations; Dwayne Prescott, Vice President of Unscripted Programming; and Karen Fong, Payroll Manager. Plaintiffs produced 3,412 documents in response to AMA's Requests for Production. Electronic discovery hosting, processing, and review platform services were provided by Marlowe Asset Management Litigation Technology Inc., located at 600 Anton Boulevard, Suite 900, Costa Mesa, California 92626. Additionally, a third-party subpoena was issued to NovaPay Solutions Inc. on February 8, 2023, pursuant to Code of Civil Procedure section 2020.010 et seq., seeking production of payroll and timekeeping records, system configuration records (including default settings and any client-specific customizations for AMA's account), and audit logs reflecting changes to meal period deduction settings, the Missed Meal Attestation feature, and related system parameters.

Depositions. A total of eighteen (18) depositions were taken in this action — eleven (11) by Plaintiffs and seven (7) by AMA. The deponents included all three named plaintiffs (Marisol Fuentes, Derek Halloran, and Yesenia Padilla); AMA's persons most knowledgeable designated under Code of Civil Procedure section 2025.230 (Lorraine Okafor, Celine Arroyo, and Karen Fong); AMA's President, Jonathan Mercer; AMA's Vice President of Unscripted Programming, Dwayne Prescott; Marcus Yee of NovaPay Solutions Inc.; multiple show unit production managers who had direct supervisory responsibility over non-exempt employees at various AMA production facilities; and several former AMA employees who had been members of the putative class. The depositions were conducted over multiple days in Los Angeles and were transcribed by certified court reporters. The deposition testimony addressed, among other subjects, the implementation and operation of the NovaPay Solutions TimeTrack Pro system, the activation and deactivation of the Missed Meal Attestation feature across different show units, the variability of meal and rest period practices at AMA's various production facilities, the training and supervision of non-exempt employees, and the individual experiences of the named plaintiffs and other putative class members.

5. Both sides retained and disclosed expert witnesses in connection with the class certification proceedings and in anticipation of trial. The expert discovery in this matter was extensive and provided both parties — as well as the mediator and the Court — with competing, rigorous analyses of the potential class damages exposure and the manageability of classwide adjudication.

Plaintiffs retained and disclosed Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC as their damages expert. Dr. Rennick prepared and served an expert report dated April 28, 2023, in which he opined, based on his analysis of AMA's payroll data, timekeeping records, and the NovaPay Solutions system configuration data, that the aggregate damages sustained by the putative class totaled approximately $38.6 million. This figure included approximately $12.2 million in PAGA penalties calculated under California Labor Code sections 2699(f)(2) and 2699.5. Dr. Rennick's damages model assumed, among other things, that the automatic meal period deduction resulted in a compensable violation each time it was applied, regardless of whether the employee actually took a compliant meal period, and that certain derivative penalties (including wage statement penalties and waiting time penalties) flowed automatically from the primary meal period violations.

AMA retained two expert witnesses. First, AMA disclosed Dr. Catherine Lindstrom of Hargrove Analytics Inc. as its damages and economics expert. Dr. Lindstrom prepared and served a rebuttal expert report dated June 9, 2023, in which she opined that the aggregate damages sustained by the putative class, properly calculated and accounting for the significant limitations in Dr. Rennick's methodology, totaled approximately $5.8 million. Dr. Lindstrom's analysis excluded PAGA penalties, which Dr. Lindstrom opined were subject to significant reduction by the Court in the exercise of its discretion under California Labor Code section 2699(e)(2), particularly in light of AMA's good faith compliance efforts and the remedial steps taken by AMA during the class period. Second, AMA disclosed Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC as an expert in industrial and organizational psychology, retained to address issues of commonality and typicality relevant to class certification. Dr. Makhija prepared and served an expert report dated May 19, 2023, in which he opined, based on his review of deposition testimony, AMA's operational data, and his own analysis of AMA's organizational structure, that there was significant variability in scheduling practices, meal and rest break administration, and the degree of supervisory discretion exercised by production managers across AMA's seven (7) California production facilities and fourteen (14) distinct show units. Dr. Makhija's opinions were central to AMA's opposition to class certification on the rest period, off-the-clock, and overtime claims.

6. The class certification proceedings in this action were fully briefed and contested. On April 14, 2023, Plaintiffs filed their Motion for Class Certification, seeking certification of a class of all current and former non-exempt, hourly employees of AMA who worked in the State of California during the proposed class period, on all claims asserted in the Consolidated Complaint. On June 16, 2023, AMA filed its Opposition to the Motion for Class Certification. AMA's Opposition was supported by the declarations of Lorraine Okafor, Senior Vice President of Human Resources; Celine Arroyo, Director of Production Operations; Karen Fong, Payroll Manager; Dr. Rajesh Makhija; and Dr. Catherine Lindstrom. AMA's Opposition argued, among other things, that individual issues predominated on the rest period, off-the-clock, overtime, minimum wage, and waiting time penalty claims due to the significant variability in working conditions across AMA's California operations, and that Plaintiffs' damages model failed to account for the individualized nature of many of the alleged violations. On July 7, 2023, Plaintiffs filed their Reply in support of certification.

The class certification hearing was held before the Honorable Raymond Escobedo on July 28, 2023. On August 11, 2023, the Court issued its Order granting in part and denying in part Plaintiffs' Motion for Class Certification. The Court certified the following claims for class treatment: (a) the first meal period automatic deduction claim, finding that AMA's use of the auto-deduction feature in the NovaPay Solutions TimeTrack Pro system, combined with the inconsistent activation of the Missed Meal Attestation feature across show units, presented a common question susceptible to classwide proof; (b) the derivative wage statement claim under California Labor Code section 226, which the Court found was derivative of the certified meal period claim; and (c) the UCL claim under California Business and Professions Code section 17200, which the Court similarly found was derivative of the certified meal period claim. The Court denied certification on the rest period claims, the second meal period claims, the off-the-clock and overtime claims, the minimum wage claims, and the waiting time penalty claims. With respect to each of these denied claims, the Court found that the evidence demonstrated significant variation in the manner in which these policies were implemented and supervised across AMA's fourteen show units and seven production facilities, and that resolution of these claims would require individualized inquiry into the circumstances of each class member's employment experience, thereby defeating the predominance and superiority requirements.

The PAGA representative claim was permitted to proceed alongside the certified class claims as a representative action, consistent with the nature of PAGA claims and the Court's prior rulings in this matter.

The class, as certified by the Court, was defined as follows: "All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through the date of preliminary approval of any class settlement, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system." The estimated size of the certified class is approximately 1,850 individuals.

7. The Settlement Agreement now before the Court for preliminary approval was reached after extensive, arm's-length negotiations, culminating in two full-day mediation sessions before the Honorable Patricia Okoro (Ret.). Judge Okoro is a retired Judge of the Los Angeles County Superior Court with over twenty-five (25) years of distinguished service on the bench. She is affiliated with Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Judge Okoro has extensive experience mediating complex employment class actions and PAGA representative actions, particularly in the entertainment and hospitality industries. She is widely respected by practitioners on both the plaintiff and defense sides of the employment bar, and her selection as mediator was the product of mutual agreement between the parties.

The first mediation session was held on August 25, 2023, and focused exclusively on the class action claims. The session lasted approximately seven (7) hours. Over the course of that day, both sides presented detailed mediation statements and made extensive oral presentations to Judge Okoro. The parties exchanged multiple offers and counteroffers, and while the gap between the parties was significantly narrowed during this session, the parties were unable to reach agreement on all material terms and the session concluded without a settlement.

The second mediation session was held on September 8, 2023, and addressed both the class action claims and a related executive dispute that had arisen between AMA and a former officer. This session lasted approximately nine (9) hours. After further extensive negotiations, including additional exchanges of offers and counteroffers facilitated by Judge Okoro, the parties reached agreement on the material terms of the class action settlement. The total combined mediation effort spanned approximately sixteen (16) hours across the two sessions.

I can attest, based on my direct participation in both mediation sessions and in all pre-mediation and post-mediation negotiations, that the negotiations were adversarial, arm's-length, and hard-fought at every stage. The parties vigorously advocated their respective positions, and the settlement was reached only after each side had thoroughly considered the strengths and weaknesses of its position in light of the extensive discovery record, the competing expert opinions, and the Court's class certification order. At no point during the course of the negotiations did AMA's counsel engage in any form of collusion or improper coordination with Plaintiffs' counsel regarding the settlement terms, the allocation of the settlement fund, the amount of attorneys' fees, or any other aspect of the proposed settlement.

The participants at both mediation sessions were as follows: for AMA — Gregory Tanaka, Vice President of Legal and Compliance; Lorraine Okafor, Senior Vice President of Human Resources (who participated by telephone during portions of both sessions); and defense counsel Renata Vasquez and Devon Archer of Calderwood & Harkness LLP; for Plaintiffs — lead class counsel Marco Castellano and Diane Salas, co-counsel Trevor Kim, and named plaintiff Marisol Fuentes. PAGA co-counsel Sandra Higuera of Veltrano Employment Law Group PC joined portions of both mediation sessions by telephone to participate in discussions concerning the PAGA component of the settlement.

8. The Gross Settlement Amount ("GSA") of the proposed Settlement Agreement is Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000.00). The GSA is non-reversionary, meaning that no portion of the fund will revert to AMA; any unclaimed funds will be distributed pro rata to participating class members or, if the amounts are de minimis, to a cy pres recipient to be approved by the Court.

The GSA of $14,750,000 represents approximately 38.2% of Plaintiffs' expert Dr. Rennick's total damages calculation of $38.6 million. In my experience handling more than forty (40) employment class actions in the state and federal courts of California, settlements in wage-and-hour class actions typically fall within a range of approximately 15% to 40% of the plaintiff's claimed aggregate exposure, depending on the relative strength of the claims and defenses, the stage of the litigation, the extent of discovery, and other factors specific to the individual case. The settlement in this matter falls at the upper end of that range, which is a strong indicator of the fairness and reasonableness of the proposed settlement and the quality of the result achieved for the class.

The settlement amount reflects a careful assessment of the following factors, each of which was extensively discussed during the mediation process:

(a) The strength of Plaintiffs' meal period claim following the Court's certification order. The Court's August 11, 2023 Order granting certification of the first meal period auto-deduction claim represented a significant development in the litigation. The Court found that AMA's uniform application of the automatic meal period deduction in the NovaPay Solutions TimeTrack Pro system, combined with the inconsistent activation of the Missed Meal Attestation feature across show units, presented a common question susceptible to classwide proof. This ruling substantially increased AMA's exposure on the meal period claim and strengthened Plaintiffs' bargaining position in settlement negotiations.

(b) AMA's meritorious defenses. Notwithstanding the certification of the meal period claim, AMA retained meritorious defenses. Dr. Makhija's expert analysis demonstrated significant variation in working conditions, scheduling practices, and supervisory discretion across AMA's fourteen (14) show units and seven (7) production facilities. AMA maintained that even with respect to the certified meal period claim, individual issues regarding whether particular employees actually missed meal periods or were denied the opportunity to take compliant meal periods would arise at trial, potentially rendering the class unmanageable. These defenses created meaningful trial risk for Plaintiffs.

(c) The disparity between the competing damages models. The parties' respective damages experts arrived at dramatically different assessments of aggregate exposure. Plaintiffs' expert, Dr. Rennick, opined on total damages of approximately $38.6 million, while AMA's expert, Dr. Lindstrom, opined on aggregate damages of approximately $5.8 million, exclusive of PAGA penalties. This wide disparity — a gap of approximately $32.8 million — created substantial uncertainty as to the likely outcome at trial and provided strong incentive for both sides to resolve the matter through settlement rather than risk an adverse result.

(d) The denial of certification on the majority of Plaintiffs' claims. The Court's denial of certification on the rest period, second meal period, off-the-clock/overtime, minimum wage, and waiting time penalty claims eliminated the most individualized and, in many respects, the most exposure-heavy claims from class treatment. This ruling significantly reduced the overall litigation exposure for AMA and, correspondingly, reduced the recovery that Plaintiffs could reasonably expect to achieve on a classwide basis.

(e) The significant litigation risk on both sides at trial. Both parties faced meaningful risk at trial. For Plaintiffs, the risk included the possibility that the Court would decertify the class prior to trial, that the jury would credit AMA's evidence of variability across show units, or that damages would be assessed at or near the lower end of the range suggested by Dr. Lindstrom's analysis. For AMA, the risk included the possibility of an adverse verdict on the certified meal period claim, the potential for substantial PAGA penalties, and the significant cost and distraction of a multi-week jury trial involving complex payroll data and timekeeping system evidence.

(f) The PAGA exposure and the Court's discretion to reduce penalties. Plaintiffs' expert claimed $12.2 million in PAGA penalties. While AMA vigorously contested both the basis for and the magnitude of these claimed penalties, PAGA exposure remained a significant risk factor. At the same time, the Court's broad discretion to reduce PAGA penalties under California Labor Code section 2699(e)(2) — particularly where, as here, the defendant undertook remedial measures during the class period — tempered the magnitude of that exposure.

In light of all of the foregoing factors, I believe the GSA of $14,750,000 represents a fair, adequate, and reasonable settlement of the certified class claims and the PAGA representative claims.

9. The GSA of $14,750,000 is allocated as follows, subject in all respects to the approval of this Court:

All of the foregoing amounts, including the attorneys' fees, litigation costs, service awards, administration costs, and PAGA allocation, are subject to the Court's review and approval at the final approval hearing.

Based on the estimated class size of approximately 1,850 individuals, the estimated average individual payment to participating class members from the Net Settlement Fund is approximately $4,460.00 per class member. Actual individual payments will vary based on each class member's weeks worked during the class period and recorded overtime hours, in accordance with the distribution formula set forth in the Settlement Agreement. The distribution formula allocates sixty percent (60%) of each class member's individual share based on the number of weeks worked during the class period and forty percent (40%) based on the class member's recorded overtime hours during the class period. This formula was negotiated at arm's length between the parties and reflects the relative weight of different working patterns within the class, recognizing that employees who worked more weeks and more overtime hours during the class period were disproportionately affected by the alleged violations.

10. The Settlement Agreement allocates Seven Hundred Fifty Thousand Dollars ($750,000.00) from the GSA for the resolution of the PAGA representative claims. In accordance with California Labor Code section 2699(i), seventy-five percent (75%) of the PAGA allocation, or $562,500.00, will be paid to the Labor and Workforce Development Agency. The remaining twenty-five percent (25%), or $187,500.00, will be distributed to aggrieved employees as part of the Net Settlement Fund.

The $750,000 PAGA payment represents a substantial reduction from Plaintiffs' claimed $12.2 million in PAGA penalties. This reduction reflects the parties' informed assessment of the following considerations: (a) the Court's broad discretion to reduce PAGA penalties under California Labor Code section 2699(e)(2), which authorizes the Court to award a lesser amount than the maximum penalty where the amount would otherwise be "unjust, arbitrary and oppressive, or confiscatory"; (b) AMA's good faith compliance efforts during the class period, including AMA's engagement of an outside consultant to audit its timekeeping practices, its remediation of certain settings within the NovaPay Solutions TimeTrack Pro system, and its implementation of enhanced meal period attestation procedures at several production facilities beginning in the third quarter of 2022; and (c) the parties' assessment of the significant litigation risks associated with the PAGA claims, including the risk that the Court would exercise its discretion to substantially reduce any PAGA penalty award at trial.

11. The Settlement Agreement provides for a broad release of all class and PAGA claims arising from the operative facts alleged in the Consolidated Complaint. The release encompasses all certified and non-certified wage-and-hour claims, including but not limited to claims for meal period violations, rest period violations, off-the-clock and overtime violations, minimum wage violations, wage statement violations under California Labor Code section 226, and waiting time penalties under California Labor Code sections 201 through 203. The release further encompasses all PAGA claims asserted or that could have been asserted under California Labor Code section 2698 et seq., and all individual claims that could have been asserted based on the facts alleged in the Consolidated Complaint, the facts discovered during the course of the litigation, and the facts within the scope of the PAGA notice filed with the LWDA.

The class period, as defined in the Settlement Agreement, extends from November 1, 2018 through October 31, 2023. This period is consistent with the applicable statute of limitations for the claims at issue and captures the full scope of the alleged violations.

This comprehensive release provides meaningful finality for AMA and its parent company, Aurelius Global Media Group PLC, and eliminates the risk of follow-on individual or representative litigation predicated on the same or related facts. The release was a material consideration for AMA in agreeing to the settlement amount. It is expressly provided in the Settlement Agreement that AMA admits no liability under the settlement, and nothing in the Settlement Agreement or this declaration should be construed as an admission by AMA of any violation of law, any wrongdoing, or any liability to the class, to any individual class member, or to the LWDA.

12. The parties have selected Meridian Settlement Services LLC as the claims administrator for the proposed settlement. Meridian's principal contact for this engagement is Angela Truong, and Meridian's offices are located at 1600 East Fourth Street, Suite 240, Santa Ana, California 92701. Meridian has extensive experience in the administration of employment class action settlements in California courts and has been approved as a claims administrator by numerous courts throughout the state. The budget for Meridian's administration services is $385,000.00, to be paid from the GSA.

The proposed notice plan, which has been developed in consultation with Meridian and is described in detail in the Settlement Agreement, includes the following components:

(a) Long-Form Class Notice. A long-form class notice, consisting of approximately four (4) pages in plain language, will be mailed by first-class United States mail to the last known address of each class member. The addresses to be used for the initial mailing will be obtained from AMA's personnel and payroll records, which AMA will provide to Meridian within ten (10) business days of entry of the Preliminary Approval Order. Prior to mailing, Meridian will perform a search of the National Change of Address database maintained by the United States Postal Service to update any addresses that are no longer current.

(b) Summary Postcard Notice. A summary postcard class notice will also be mailed to each class member, directing class members to the settlement website for additional information, including the full text of the long-form notice and the Settlement Agreement.

(c) Settlement Website. Meridian will establish and maintain a dedicated settlement website that will contain the full long-form class notice, the Settlement Agreement, the motion for preliminary approval and supporting papers, information regarding the opt-out and objection procedures, answers to frequently asked questions, and contact information for class counsel and the claims administrator.

The long-form class notice clearly and conspicuously informs class members of: the nature of the case and the claims that have been asserted; the material terms of the settlement, including the Gross Settlement Amount, the Net Settlement Fund, and the proposed allocations; the estimated average payment to class members; the distribution formula by which individual payments will be calculated (sixty percent (60%) based on weeks worked during the class period and forty percent (40%) based on recorded overtime hours); the right of each class member to opt out of the settlement and the procedures for doing so; the right of each class member to submit a written objection to the settlement and the procedures for doing so; the date, time, and location of the final approval hearing; and contact information for class counsel and the claims administrator.

13. Under the terms of the Settlement Agreement, class members will have sixty (60) days from the date of mailing of the class notice to either opt out of the settlement or submit written objections to the proposed settlement. The opt-out procedure requires that a class member submit a signed, written request for exclusion to the claims administrator postmarked no later than the last day of the sixty-day opt-out period. The objection procedure requires that a class member submit a signed, written statement of objection to the claims administrator postmarked no later than the last day of the sixty-day objection period. The Settlement Agreement provides that if the number of valid opt-outs exceeds five percent (5%) of the total class membership — that is, if ninety-three (93) or more individuals timely and validly opt out — AMA shall have the right, in its sole discretion, to void the Settlement Agreement in its entirety. This walk-away provision was negotiated at arm's length and provides AMA with a reasonable safeguard against the risk that an excessive number of exclusions would undermine the value of the comprehensive release that is a material component of the settlement. The proposed notice plan, including the sixty-day response period, complies with the requirements of due process under the Fourteenth Amendment to the United States Constitution and the California Constitution, as well as the requirements set forth in the California Rules of Court.

14. Based on my eighteen (18) years of experience in the defense of employment class actions in California, and my direct involvement in every phase of this litigation from its inception, it is my professional opinion that the Settlement Agreement represents a fair, reasonable, and adequate resolution of the claims at issue. I do not make this statement lightly, nor do I offer it as a formulaic recitation. Rather, this opinion is grounded in my detailed knowledge of the facts of this case, the applicable law, the competing expert analyses, and the relative risks faced by each party at trial.

The settlement was reached only after the following extensive pre-settlement proceedings: (a) extensive pre-mediation investigation and formal discovery, including the production of 147,832 documents (approximately 1.2 million pages), the completion of eighteen (18) depositions, and the exchange of voluminous written discovery; (b) the exchange of competing expert reports, with aggregate damages opinions ranging from $5.8 million (Defense) to $38.6 million (Plaintiffs), reflecting a wide range of possible outcomes at trial; (c) full briefing and a contested hearing on Plaintiffs' Motion for Class Certification, resulting in the Court's August 11, 2023 Order granting certification in part and denying certification in part; (d) two full-day mediation sessions, totaling approximately sixteen (16) hours of mediation, before an experienced, retired judicial officer; and (e) extensive arm's-length negotiations conducted throughout the mediation process and in the period between and following the mediation sessions.

I can state unequivocally that there was no collusion between AMA and Plaintiffs' counsel at any stage of this litigation or the settlement negotiations. The parties' negotiations were adversarial and contentious throughout, and the settlement terms reflect genuine, arm's-length bargaining between well-informed counsel representing sophisticated parties with diametrically opposed interests. Both sides had a thorough and detailed understanding of the strengths and weaknesses of their respective positions before engaging in settlement discussions, and the settlement amount and terms reflect a reasonable compromise in light of the significant risks and uncertainties facing each party.

15. AMA maintains an employment practices liability ("EPL") insurance policy with Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837). The EPL policy provides coverage for employment-related claims, including wage-and-hour class actions, subject to a self-insured retention of Five Million Dollars ($5,000,000.00) and an aggregate coverage limit of Fifteen Million Dollars ($15,000,000.00). AMA tendered its defense in this matter to Pemberton Mutual Assurance Co. on November 8, 2022, promptly following the filing of the Fuentes complaint. By letter dated December 22, 2022, Pemberton acknowledged coverage for this matter, subject to a full reservation of rights with respect to certain categories of damages and penalties.

In connection with the proposed settlement, Pemberton has authorized a policy contribution of Nine Million Two Hundred Fifty Thousand Dollars ($9,250,000.00) toward the class settlement amount. The remaining Five Million Five Hundred Thousand Dollars ($5,500,000.00) will be funded directly by AMA. The settlement has been structured to maximize coverage under the EPL policy, consistent with the terms and conditions of the policy and the parties' obligations thereunder.

16. AMA respectfully proposes the following timeline for the remaining proceedings in connection with the proposed settlement:

The foregoing timeline is subject to adjustment by the Court and is presented as a proposed schedule for the orderly administration of the settlement.

17. Based on all of the foregoing, I respectfully submit that the proposed class action settlement is fair, adequate, and reasonable, and that it was the product of arm's-length, informed negotiations conducted by experienced counsel on both sides, facilitated by an experienced and well-regarded mediator. The settlement provides substantial monetary relief to the approximately 1,850 members of the certified class, resolves the PAGA representative claims, and provides meaningful finality for all parties. I respectfully request that this Court: (a) grant preliminary approval of the Settlement Agreement; (b) provisionally certify the settlement class as defined in the Settlement Agreement; (c) approve the proposed class notice and notice plan as satisfying the requirements of due process and the California Rules of Court; (d) appoint Meridian Settlement Services LLC as the claims administrator; and (e) schedule a final approval hearing at the earliest date convenient to the Court, approximately ninety (90) days following the entry of the Preliminary Approval Order.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed this 22nd day of September, 2023, in Los Angeles, California.

/s/ Renata Vasquez

________________________________________

RENATA VASQUEZ (SBN 224578) Partner, Calderwood & Harkness LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Counsel of Record for Defendant Aurelius Media Americas Inc.

Lead Case No.:	22STCV38214
Consolidated with:	22STCV39501
Assigned for All Purposes to:	Hon. Raymond Escobedo, Dept. 34
Component	Amount
Attorneys' Fees (33.33% of GSA)	$4,916,175.00
Litigation Costs Reimbursement	$412,300.00
Class Representative Service Awards (Total)	$35,000.00
— Marisol Fuentes	$15,000.00
— Derek Halloran	$10,000.00
— Yesenia Padilla	$10,000.00
Settlement Administration Costs (Meridian Settlement Services LLC)	$385,000.00
PAGA Payment (Total)	$750,000.00
— 75% to LWDA	$562,500.00
— 25% to Aggrieved Employees	$187,500.00
Net Settlement Fund (NSF)	$8,251,525.00
Event	Proposed Date
Settlement Agreement Execution	September 15, 2023 (completed)
Preliminary Approval Motion (this motion)	September 22, 2023
Preliminary Approval (requested)	October 2023
Class Notice Mailing (by Meridian Settlement Services LLC)	Within 30 days of Preliminary Approval Order
Opt-Out / Objection Deadline	60 days after Class Notice mailing
Motion for Final Approval and Fee Petition	Filed no later than 14 days before Final Approval Hearing
Final Approval Hearing	Approximately 90 days after Preliminary Approval Order
Distribution of Settlement Payments	Within 30 days of Final Approval Order becoming final

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
MARISOL FUENTES, DEREK HALLORAN, and YESENIA PADILLA, individually and on behalf of all others similarly situated,
Plaintiffs,
v.
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,
Defendants.
DECLARATION OF RENATA VASQUEZ IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
Filed: September 22, 2023
I, Renata Vasquez, declare as follows:
1. I am a partner at the law firm of Calderwood & Harkness LLP, located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017. I am an active member of the State Bar of California, Bar Number 224578, and have been admitted to practice law in the State of California since 2005. I serve as the responsible partner and counsel of record for Defendant Aurelius Media Americas Inc. ("AMA") in the above-captioned consolidated class action. I have over eighteen (18) years of experience in the defense of employment class actions and representative actions under the Private Attorneys General Act of 2004 ("PAGA") in the state and federal courts of California. Over the course of my career, I have handled more than forty (40) such matters, including complex wage-and-hour class actions involving meal and rest period claims, off-the-clock work claims, overtime and minimum wage claims, and derivative wage statement and waiting time penalty claims. By reason of my extensive involvement in this litigation from its inception, I have personal knowledge of the facts set forth in this declaration and, if called upon to do so, could and would competently testify thereto.
2. Calderwood & Harkness LLP was retained by AMA to represent it in this action effective November 1, 2022, under our internal matter reference C&H Matter No. 1017-00004. AMA is a corporation organized and existing under the laws of the State of Delaware and is qualified to transact business in the State of California. AMA maintains its principal office at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a public limited company organized under the laws of England and Wales, with its registered headquarters located at 34 Kingsway, London WC2B 6EX, United Kingdom. AMA is a media production and entertainment company that, at relevant times during the class period, employed approximately 3,200 employees in the United States, of whom approximately 2,400 were based in the State of California. AMA's California operations encompass seven (7) production facilities situated across Los Angeles County, Ventura County, and Orange County, and AMA operates a total of fourteen (14) distinct show units that produce unscripted and scripted programming for various broadcast and streaming platforms. The scope and diversity of AMA's California operations are directly relevant to the issues addressed in this declaration, including the analysis of commonality, the range of damages estimates, and the ultimate fairness and reasonableness of the proposed settlement.
3. The procedural history of this litigation is as follows. On November 1, 2022, named Plaintiff Marisol Fuentes filed a putative class action complaint in this Court, assigned Case No. 22STCV38214, alleging systematic wage-and-hour violations on behalf of a putative class of approximately 1,850 current and former non-exempt, hourly employees of AMA who worked in the State of California. On November 18, 2022, a related complaint was filed by Derek Halloran under Case No. 22STCV39501, asserting substantially identical claims against AMA and arising from the same operative facts. On February 3, 2023, this Court entered an Order consolidating the Fuentes and Halloran actions, with Case No. 22STCV38214 designated as the lead case and the consolidated matter assigned to the Honorable Raymond Escobedo, Department 34, for all purposes. Thereafter, Yesenia Padilla was added as a named plaintiff in the consolidated action. On February 17, 2023, AMA filed its Answer and Affirmative Defenses to the Consolidated Complaint, denying liability and asserting, among other things, affirmative defenses based on individual variations in working conditions, compliance with applicable law, good faith, and the absence of a uniform policy or practice giving rise to classwide liability.
It is also relevant to the Court's consideration that a PAGA notice was filed with the Labor and Workforce Development Agency ("LWDA") on September 15, 2022, pursuant to California Labor Code section 2699.3(a). The sixty-five (65) day waiting period prescribed by statute expired on November 14, 2022, and the LWDA took no action in response to the notice during that period or at any time thereafter, thereby permitting the PAGA representative claims to proceed in this Court.
Plaintiffs' claims in the Consolidated Complaint are asserted under the following provisions of California law: California Labor Code sections 226.7 (meal and rest period premiums), 510 and 512 (meal period requirements), 1194, 1197, and 1197.1 (minimum wage), 1198 (maximum hours), 226 (wage statement requirements), and 201 through 203 (waiting time penalties); California Business and Professions Code section 17200 et seq. (the Unfair Competition Law or "UCL"); and PAGA representative claims under California Labor Code section 2698 et seq. The gravamen of Plaintiffs' claims relates primarily to AMA's use of an automatic meal period deduction feature in the NovaPay Solutions TimeTrack Pro timekeeping system, which Plaintiffs allege systematically deducted thirty (30) minutes from employees' daily work time for meal periods regardless of whether a compliant, duty-free meal period was actually provided. Plaintiffs further allege that AMA failed to provide compliant meal and rest periods across its California production facilities and show units, and that AMA's employees were required to perform compensable work off the clock before and after their scheduled shifts.
4. The parties conducted extensive discovery over the course of approximately seven (7) months prior to the mediation sessions that culminated in the settlement now before the Court for preliminary approval. The breadth and depth of the discovery in this matter were substantial and provided both sides with a thorough factual record upon which to evaluate the strengths and weaknesses of their respective positions, assess the range of potential damages, and engage in informed, arm's-length settlement negotiations.
Written discovery. On the side of written discovery propounded by Plaintiffs, AMA responded to Plaintiffs' First Set of Form Interrogatories (Employment Law), two (2) sets of Special Interrogatories encompassing Special Interrogatory Nos. 1 through 78, and two (2) sets of Requests for Production of Documents encompassing Request Nos. 1 through 62. AMA also served supplemental responses to Requests for Production Nos. 14, 27, 33, and 41, which pertained to, among other things, the configuration and settings of the NovaPay Solutions TimeTrack Pro system, the activation history of the Missed Meal Attestation feature, the meal period waiver forms utilized at each of AMA's California facilities, and AMA's internal audit of timekeeping compliance conducted in the second quarter of 2022. AMA, in turn, propounded its own written discovery to each of the three named plaintiffs. Specifically, AMA served Form Interrogatories (Employment Law), Special Interrogatories Nos. 1 through 35, and Requests for Production of Documents Nos. 1 through 20 upon each of Marisol Fuentes, Derek Halloran, and Yesenia Padilla, and all three named plaintiffs served timely responses thereto.
Electronically Stored Information and Document Production. On January 13, 2023, the parties entered into a stipulation governing the production of electronically stored information (the "ESI Protocol Stipulation"), which was filed with this Court. The ESI Protocol Stipulation established the agreed-upon format for production of electronically stored information, the search methodology to be employed (including agreed-upon search terms and date ranges), de-duplication protocols, privilege logging requirements, and clawback provisions pursuant to Federal Rule of Evidence 502(d) by analogy. In accordance with the ESI Protocol Stipulation and Plaintiffs' Requests for Production, AMA produced a total of 147,832 documents, comprising approximately 1.2 million pages, from seven (7) identified custodians. The identified custodians were: Lorraine Okafor, Senior Vice President of Human Resources; Gregory Tanaka, Vice President of Legal and Compliance; Marcus Yee, a third-party custodian employed by NovaPay Solutions Inc. who was responsible for the implementation and configuration of the TimeTrack Pro system for AMA's account; Jonathan Mercer, President of AMA; Celine Arroyo, Director of Production Operations; Dwayne Prescott, Vice President of Unscripted Programming; and Karen Fong, Payroll Manager. Plaintiffs produced 3,412 documents in response to AMA's Requests for Production. Electronic discovery hosting, processing, and review platform services were provided by Marlowe Asset Management Litigation Technology Inc., located at 600 Anton Boulevard, Suite 900, Costa Mesa, California 92626. Additionally, a third-party subpoena was issued to NovaPay Solutions Inc. on February 8, 2023, pursuant to Code of Civil Procedure section 2020.010 et seq., seeking production of payroll and timekeeping records, system configuration records (including default settings and any client-specific customizations for AMA's account), and audit logs reflecting changes to meal period deduction settings, the Missed Meal Attestation feature, and related system parameters.
Depositions. A total of eighteen (18) depositions were taken in this action — eleven (11) by Plaintiffs and seven (7) by AMA. The deponents included all three named plaintiffs (Marisol Fuentes, Derek Halloran, and Yesenia Padilla); AMA's persons most knowledgeable designated under Code of Civil Procedure section 2025.230 (Lorraine Okafor, Celine Arroyo, and Karen Fong); AMA's President, Jonathan Mercer; AMA's Vice President of Unscripted Programming, Dwayne Prescott; Marcus Yee of NovaPay Solutions Inc.; multiple show unit production managers who had direct supervisory responsibility over non-exempt employees at various AMA production facilities; and several former AMA employees who had been members of the putative class. The depositions were conducted over multiple days in Los Angeles and were transcribed by certified court reporters. The deposition testimony addressed, among other subjects, the implementation and operation of the NovaPay Solutions TimeTrack Pro system, the activation and deactivation of the Missed Meal Attestation feature across different show units, the variability of meal and rest period practices at AMA's various production facilities, the training and supervision of non-exempt employees, and the individual experiences of the named plaintiffs and other putative class members.
5. Both sides retained and disclosed expert witnesses in connection with the class certification proceedings and in anticipation of trial. The expert discovery in this matter was extensive and provided both parties — as well as the mediator and the Court — with competing, rigorous analyses of the potential class damages exposure and the manageability of classwide adjudication.
Plaintiffs retained and disclosed Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC as their damages expert. Dr. Rennick prepared and served an expert report dated April 28, 2023, in which he opined, based on his analysis of AMA's payroll data, timekeeping records, and the NovaPay Solutions system configuration data, that the aggregate damages sustained by the putative class totaled approximately $38.6 million. This figure included approximately $12.2 million in PAGA penalties calculated under California Labor Code sections 2699(f)(2) and 2699.5. Dr. Rennick's damages model assumed, among other things, that the automatic meal period deduction resulted in a compensable violation each time it was applied, regardless of whether the employee actually took a compliant meal period, and that certain derivative penalties (including wage statement penalties and waiting time penalties) flowed automatically from the primary meal period violations.
AMA retained two expert witnesses. First, AMA disclosed Dr. Catherine Lindstrom of Hargrove Analytics Inc. as its damages and economics expert. Dr. Lindstrom prepared and served a rebuttal expert report dated June 9, 2023, in which she opined that the aggregate damages sustained by the putative class, properly calculated and accounting for the significant limitations in Dr. Rennick's methodology, totaled approximately $5.8 million. Dr. Lindstrom's analysis excluded PAGA penalties, which Dr. Lindstrom opined were subject to significant reduction by the Court in the exercise of its discretion under California Labor Code section 2699(e)(2), particularly in light of AMA's good faith compliance efforts and the remedial steps taken by AMA during the class period. Second, AMA disclosed Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC as an expert in industrial and organizational psychology, retained to address issues of commonality and typicality relevant to class certification. Dr. Makhija prepared and served an expert report dated May 19, 2023, in which he opined, based on his review of deposition testimony, AMA's operational data, and his own analysis of AMA's organizational structure, that there was significant variability in scheduling practices, meal and rest break administration, and the degree of supervisory discretion exercised by production managers across AMA's seven (7) California production facilities and fourteen (14) distinct show units. Dr. Makhija's opinions were central to AMA's opposition to class certification on the rest period, off-the-clock, and overtime claims.
6. The class certification proceedings in this action were fully briefed and contested. On April 14, 2023, Plaintiffs filed their Motion for Class Certification, seeking certification of a class of all current and former non-exempt, hourly employees of AMA who worked in the State of California during the proposed class period, on all claims asserted in the Consolidated Complaint. On June 16, 2023, AMA filed its Opposition to the Motion for Class Certification. AMA's Opposition was supported by the declarations of Lorraine Okafor, Senior Vice President of Human Resources; Celine Arroyo, Director of Production Operations; Karen Fong, Payroll Manager; Dr. Rajesh Makhija; and Dr. Catherine Lindstrom. AMA's Opposition argued, among other things, that individual issues predominated on the rest period, off-the-clock, overtime, minimum wage, and waiting time penalty claims due to the significant variability in working conditions across AMA's California operations, and that Plaintiffs' damages model failed to account for the individualized nature of many of the alleged violations. On July 7, 2023, Plaintiffs filed their Reply in support of certification.
The class certification hearing was held before the Honorable Raymond Escobedo on July 28, 2023. On August 11, 2023, the Court issued its Order granting in part and denying in part Plaintiffs' Motion for Class Certification. The Court certified the following claims for class treatment: (a) the first meal period automatic deduction claim, finding that AMA's use of the auto-deduction feature in the NovaPay Solutions TimeTrack Pro system, combined with the inconsistent activation of the Missed Meal Attestation feature across show units, presented a common question susceptible to classwide proof; (b) the derivative wage statement claim under California Labor Code section 226, which the Court found was derivative of the certified meal period claim; and (c) the UCL claim under California Business and Professions Code section 17200, which the Court similarly found was derivative of the certified meal period claim. The Court denied certification on the rest period claims, the second meal period claims, the off-the-clock and overtime claims, the minimum wage claims, and the waiting time penalty claims. With respect to each of these denied claims, the Court found that the evidence demonstrated significant variation in the manner in which these policies were implemented and supervised across AMA's fourteen show units and seven production facilities, and that resolution of these claims would require individualized inquiry into the circumstances of each class member's employment experience, thereby defeating the predominance and superiority requirements.
The PAGA representative claim was permitted to proceed alongside the certified class claims as a representative action, consistent with the nature of PAGA claims and the Court's prior rulings in this matter.
The class, as certified by the Court, was defined as follows: "All current and former non-exempt, hourly employees of Aurelius Media Americas Inc. who worked in the State of California at any time from November 1, 2018 through the date of preliminary approval of any class settlement, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system." The estimated size of the certified class is approximately 1,850 individuals.
7. The Settlement Agreement now before the Court for preliminary approval was reached after extensive, arm's-length negotiations, culminating in two full-day mediation sessions before the Honorable Patricia Okoro (Ret.). Judge Okoro is a retired Judge of the Los Angeles County Superior Court with over twenty-five (25) years of distinguished service on the bench. She is affiliated with Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Judge Okoro has extensive experience mediating complex employment class actions and PAGA representative actions, particularly in the entertainment and hospitality industries. She is widely respected by practitioners on both the plaintiff and defense sides of the employment bar, and her selection as mediator was the product of mutual agreement between the parties.
The first mediation session was held on August 25, 2023, and focused exclusively on the class action claims. The session lasted approximately seven (7) hours. Over the course of that day, both sides presented detailed mediation statements and made extensive oral presentations to Judge Okoro. The parties exchanged multiple offers and counteroffers, and while the gap between the parties was significantly narrowed during this session, the parties were unable to reach agreement on all material terms and the session concluded without a settlement.
The second mediation session was held on September 8, 2023, and addressed both the class action claims and a related executive dispute that had arisen between AMA and a former officer. This session lasted approximately nine (9) hours. After further extensive negotiations, including additional exchanges of offers and counteroffers facilitated by Judge Okoro, the parties reached agreement on the material terms of the class action settlement. The total combined mediation effort spanned approximately sixteen (16) hours across the two sessions.
I can attest, based on my direct participation in both mediation sessions and in all pre-mediation and post-mediation negotiations, that the negotiations were adversarial, arm's-length, and hard-fought at every stage. The parties vigorously advocated their respective positions, and the settlement was reached only after each side had thoroughly considered the strengths and weaknesses of its position in light of the extensive discovery record, the competing expert opinions, and the Court's class certification order. At no point during the course of the negotiations did AMA's counsel engage in any form of collusion or improper coordination with Plaintiffs' counsel regarding the settlement terms, the allocation of the settlement fund, the amount of attorneys' fees, or any other aspect of the proposed settlement.
The participants at both mediation sessions were as follows: for AMA — Gregory Tanaka, Vice President of Legal and Compliance; Lorraine Okafor, Senior Vice President of Human Resources (who participated by telephone during portions of both sessions); and defense counsel Renata Vasquez and Devon Archer of Calderwood & Harkness LLP; for Plaintiffs — lead class counsel Marco Castellano and Diane Salas, co-counsel Trevor Kim, and named plaintiff Marisol Fuentes. PAGA co-counsel Sandra Higuera of Veltrano Employment Law Group PC joined portions of both mediation sessions by telephone to participate in discussions concerning the PAGA component of the settlement.
8. The Gross Settlement Amount ("GSA") of the proposed Settlement Agreement is Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000.00). The GSA is non-reversionary, meaning that no portion of the fund will revert to AMA; any unclaimed funds will be distributed pro rata to participating class members or, if the amounts are de minimis, to a cy pres recipient to be approved by the Court.
The GSA of $14,750,000 represents approximately 38.2% of Plaintiffs' expert Dr. Rennick's total damages calculation of $38.6 million. In my experience handling more than forty (40) employment class actions in the state and federal courts of California, settlements in wage-and-hour class actions typically fall within a range of approximately 15% to 40% of the plaintiff's claimed aggregate exposure, depending on the relative strength of the claims and defenses, the stage of the litigation, the extent of discovery, and other factors specific to the individual case. The settlement in this matter falls at the upper end of that range, which is a strong indicator of the fairness and reasonableness of the proposed settlement and the quality of the result achieved for the class.
The settlement amount reflects a careful assessment of the following factors, each of which was extensively discussed during the mediation process:
(a) The strength of Plaintiffs' meal period claim following the Court's certification order. The Court's August 11, 2023 Order granting certification of the first meal period auto-deduction claim represented a significant development in the litigation. The Court found that AMA's uniform application of the automatic meal period deduction in the NovaPay Solutions TimeTrack Pro system, combined with the inconsistent activation of the Missed Meal Attestation feature across show units, presented a common question susceptible to classwide proof. This ruling substantially increased AMA's exposure on the meal period claim and strengthened Plaintiffs' bargaining position in settlement negotiations.
(b) AMA's meritorious defenses. Notwithstanding the certification of the meal period claim, AMA retained meritorious defenses. Dr. Makhija's expert analysis demonstrated significant variation in working conditions, scheduling practices, and supervisory discretion across AMA's fourteen (14) show units and seven (7) production facilities. AMA maintained that even with respect to the certified meal period claim, individual issues regarding whether particular employees actually missed meal periods or were denied the opportunity to take compliant meal periods would arise at trial, potentially rendering the class unmanageable. These defenses created meaningful trial risk for Plaintiffs.
(c) The disparity between the competing damages models. The parties' respective damages experts arrived at dramatically different assessments of aggregate exposure. Plaintiffs' expert, Dr. Rennick, opined on total damages of approximately $38.6 million, while AMA's expert, Dr. Lindstrom, opined on aggregate damages of approximately $5.8 million, exclusive of PAGA penalties. This wide disparity — a gap of approximately $32.8 million — created substantial uncertainty as to the likely outcome at trial and provided strong incentive for both sides to resolve the matter through settlement rather than risk an adverse result.
(d) The denial of certification on the majority of Plaintiffs' claims. The Court's denial of certification on the rest period, second meal period, off-the-clock/overtime, minimum wage, and waiting time penalty claims eliminated the most individualized and, in many respects, the most exposure-heavy claims from class treatment. This ruling significantly reduced the overall litigation exposure for AMA and, correspondingly, reduced the recovery that Plaintiffs could reasonably expect to achieve on a classwide basis.
(e) The significant litigation risk on both sides at trial. Both parties faced meaningful risk at trial. For Plaintiffs, the risk included the possibility that the Court would decertify the class prior to trial, that the jury would credit AMA's evidence of variability across show units, or that damages would be assessed at or near the lower end of the range suggested by Dr. Lindstrom's analysis. For AMA, the risk included the possibility of an adverse verdict on the certified meal period claim, the potential for substantial PAGA penalties, and the significant cost and distraction of a multi-week jury trial involving complex payroll data and timekeeping system evidence.
(f) The PAGA exposure and the Court's discretion to reduce penalties. Plaintiffs' expert claimed $12.2 million in PAGA penalties. While AMA vigorously contested both the basis for and the magnitude of these claimed penalties, PAGA exposure remained a significant risk factor. At the same time, the Court's broad discretion to reduce PAGA penalties under California Labor Code section 2699(e)(2) — particularly where, as here, the defendant undertook remedial measures during the class period — tempered the magnitude of that exposure.
In light of all of the foregoing factors, I believe the GSA of $14,750,000 represents a fair, adequate, and reasonable settlement of the certified class claims and the PAGA representative claims.
9. The GSA of $14,750,000 is allocated as follows, subject in all respects to the approval of this Court:
All of the foregoing amounts, including the attorneys' fees, litigation costs, service awards, administration costs, and PAGA allocation, are subject to the Court's review and approval at the final approval hearing.
Based on the estimated class size of approximately 1,850 individuals, the estimated average individual payment to participating class members from the Net Settlement Fund is approximately $4,460.00 per class member. Actual individual payments will vary based on each class member's weeks worked during the class period and recorded overtime hours, in accordance with the distribution formula set forth in the Settlement Agreement. The distribution formula allocates sixty percent (60%) of each class member's individual share based on the number of weeks worked during the class period and forty percent (40%) based on the class member's recorded overtime hours during the class period. This formula was negotiated at arm's length between the parties and reflects the relative weight of different working patterns within the class, recognizing that employees who worked more weeks and more overtime hours during the class period were disproportionately affected by the alleged violations.
10. The Settlement Agreement allocates Seven Hundred Fifty Thousand Dollars ($750,000.00) from the GSA for the resolution of the PAGA representative claims. In accordance with California Labor Code section 2699(i), seventy-five percent (75%) of the PAGA allocation, or $562,500.00, will be paid to the Labor and Workforce Development Agency. The remaining twenty-five percent (25%), or $187,500.00, will be distributed to aggrieved employees as part of the Net Settlement Fund.
The $750,000 PAGA payment represents a substantial reduction from Plaintiffs' claimed $12.2 million in PAGA penalties. This reduction reflects the parties' informed assessment of the following considerations: (a) the Court's broad discretion to reduce PAGA penalties under California Labor Code section 2699(e)(2), which authorizes the Court to award a lesser amount than the maximum penalty where the amount would otherwise be "unjust, arbitrary and oppressive, or confiscatory"; (b) AMA's good faith compliance efforts during the class period, including AMA's engagement of an outside consultant to audit its timekeeping practices, its remediation of certain settings within the NovaPay Solutions TimeTrack Pro system, and its implementation of enhanced meal period attestation procedures at several production facilities beginning in the third quarter of 2022; and (c) the parties' assessment of the significant litigation risks associated with the PAGA claims, including the risk that the Court would exercise its discretion to substantially reduce any PAGA penalty award at trial.
11. The Settlement Agreement provides for a broad release of all class and PAGA claims arising from the operative facts alleged in the Consolidated Complaint. The release encompasses all certified and non-certified wage-and-hour claims, including but not limited to claims for meal period violations, rest period violations, off-the-clock and overtime violations, minimum wage violations, wage statement violations under California Labor Code section 226, and waiting time penalties under California Labor Code sections 201 through 203. The release further encompasses all PAGA claims asserted or that could have been asserted under California Labor Code section 2698 et seq., and all individual claims that could have been asserted based on the facts alleged in the Consolidated Complaint, the facts discovered during the course of the litigation, and the facts within the scope of the PAGA notice filed with the LWDA.
The class period, as defined in the Settlement Agreement, extends from November 1, 2018 through October 31, 2023. This period is consistent with the applicable statute of limitations for the claims at issue and captures the full scope of the alleged violations.
This comprehensive release provides meaningful finality for AMA and its parent company, Aurelius Global Media Group PLC, and eliminates the risk of follow-on individual or representative litigation predicated on the same or related facts. The release was a material consideration for AMA in agreeing to the settlement amount. It is expressly provided in the Settlement Agreement that AMA admits no liability under the settlement, and nothing in the Settlement Agreement or this declaration should be construed as an admission by AMA of any violation of law, any wrongdoing, or any liability to the class, to any individual class member, or to the LWDA.
12. The parties have selected Meridian Settlement Services LLC as the claims administrator for the proposed settlement. Meridian's principal contact for this engagement is Angela Truong, and Meridian's offices are located at 1600 East Fourth Street, Suite 240, Santa Ana, California 92701. Meridian has extensive experience in the administration of employment class action settlements in California courts and has been approved as a claims administrator by numerous courts throughout the state. The budget for Meridian's administration services is $385,000.00, to be paid from the GSA.
The proposed notice plan, which has been developed in consultation with Meridian and is described in detail in the Settlement Agreement, includes the following components:
(a) Long-Form Class Notice. A long-form class notice, consisting of approximately four (4) pages in plain language, will be mailed by first-class United States mail to the last known address of each class member. The addresses to be used for the initial mailing will be obtained from AMA's personnel and payroll records, which AMA will provide to Meridian within ten (10) business days of entry of the Preliminary Approval Order. Prior to mailing, Meridian will perform a search of the National Change of Address database maintained by the United States Postal Service to update any addresses that are no longer current.
(b) Summary Postcard Notice. A summary postcard class notice will also be mailed to each class member, directing class members to the settlement website for additional information, including the full text of the long-form notice and the Settlement Agreement.
(c) Settlement Website. Meridian will establish and maintain a dedicated settlement website that will contain the full long-form class notice, the Settlement Agreement, the motion for preliminary approval and supporting papers, information regarding the opt-out and objection procedures, answers to frequently asked questions, and contact information for class counsel and the claims administrator.
The long-form class notice clearly and conspicuously informs class members of: the nature of the case and the claims that have been asserted; the material terms of the settlement, including the Gross Settlement Amount, the Net Settlement Fund, and the proposed allocations; the estimated average payment to class members; the distribution formula by which individual payments will be calculated (sixty percent (60%) based on weeks worked during the class period and forty percent (40%) based on recorded overtime hours); the right of each class member to opt out of the settlement and the procedures for doing so; the right of each class member to submit a written objection to the settlement and the procedures for doing so; the date, time, and location of the final approval hearing; and contact information for class counsel and the claims administrator.
13. Under the terms of the Settlement Agreement, class members will have sixty (60) days from the date of mailing of the class notice to either opt out of the settlement or submit written objections to the proposed settlement. The opt-out procedure requires that a class member submit a signed, written request for exclusion to the claims administrator postmarked no later than the last day of the sixty-day opt-out period. The objection procedure requires that a class member submit a signed, written statement of objection to the claims administrator postmarked no later than the last day of the sixty-day objection period. The Settlement Agreement provides that if the number of valid opt-outs exceeds five percent (5%) of the total class membership — that is, if ninety-three (93) or more individuals timely and validly opt out — AMA shall have the right, in its sole discretion, to void the Settlement Agreement in its entirety. This walk-away provision was negotiated at arm's length and provides AMA with a reasonable safeguard against the risk that an excessive number of exclusions would undermine the value of the comprehensive release that is a material component of the settlement. The proposed notice plan, including the sixty-day response period, complies with the requirements of due process under the Fourteenth Amendment to the United States Constitution and the California Constitution, as well as the requirements set forth in the California Rules of Court.
14. Based on my eighteen (18) years of experience in the defense of employment class actions in California, and my direct involvement in every phase of this litigation from its inception, it is my professional opinion that the Settlement Agreement represents a fair, reasonable, and adequate resolution of the claims at issue. I do not make this statement lightly, nor do I offer it as a formulaic recitation. Rather, this opinion is grounded in my detailed knowledge of the facts of this case, the applicable law, the competing expert analyses, and the relative risks faced by each party at trial.
The settlement was reached only after the following extensive pre-settlement proceedings: (a) extensive pre-mediation investigation and formal discovery, including the production of 147,832 documents (approximately 1.2 million pages), the completion of eighteen (18) depositions, and the exchange of voluminous written discovery; (b) the exchange of competing expert reports, with aggregate damages opinions ranging from $5.8 million (Defense) to $38.6 million (Plaintiffs), reflecting a wide range of possible outcomes at trial; (c) full briefing and a contested hearing on Plaintiffs' Motion for Class Certification, resulting in the Court's August 11, 2023 Order granting certification in part and denying certification in part; (d) two full-day mediation sessions, totaling approximately sixteen (16) hours of mediation, before an experienced, retired judicial officer; and (e) extensive arm's-length negotiations conducted throughout the mediation process and in the period between and following the mediation sessions.
I can state unequivocally that there was no collusion between AMA and Plaintiffs' counsel at any stage of this litigation or the settlement negotiations. The parties' negotiations were adversarial and contentious throughout, and the settlement terms reflect genuine, arm's-length bargaining between well-informed counsel representing sophisticated parties with diametrically opposed interests. Both sides had a thorough and detailed understanding of the strengths and weaknesses of their respective positions before engaging in settlement discussions, and the settlement amount and terms reflect a reasonable compromise in light of the significant risks and uncertainties facing each party.
15. AMA maintains an employment practices liability ("EPL") insurance policy with Pemberton Mutual Assurance Co. (Policy No. PMA-EPL-2022-00837). The EPL policy provides coverage for employment-related claims, including wage-and-hour class actions, subject to a self-insured retention of Five Million Dollars ($5,000,000.00) and an aggregate coverage limit of Fifteen Million Dollars ($15,000,000.00). AMA tendered its defense in this matter to Pemberton Mutual Assurance Co. on November 8, 2022, promptly following the filing of the Fuentes complaint. By letter dated December 22, 2022, Pemberton acknowledged coverage for this matter, subject to a full reservation of rights with respect to certain categories of damages and penalties.
In connection with the proposed settlement, Pemberton has authorized a policy contribution of Nine Million Two Hundred Fifty Thousand Dollars ($9,250,000.00) toward the class settlement amount. The remaining Five Million Five Hundred Thousand Dollars ($5,500,000.00) will be funded directly by AMA. The settlement has been structured to maximize coverage under the EPL policy, consistent with the terms and conditions of the policy and the parties' obligations thereunder.
16. AMA respectfully proposes the following timeline for the remaining proceedings in connection with the proposed settlement:
The foregoing timeline is subject to adjustment by the Court and is presented as a proposed schedule for the orderly administration of the settlement.
17. Based on all of the foregoing, I respectfully submit that the proposed class action settlement is fair, adequate, and reasonable, and that it was the product of arm's-length, informed negotiations conducted by experienced counsel on both sides, facilitated by an experienced and well-regarded mediator. The settlement provides substantial monetary relief to the approximately 1,850 members of the certified class, resolves the PAGA representative claims, and provides meaningful finality for all parties. I respectfully request that this Court: (a) grant preliminary approval of the Settlement Agreement; (b) provisionally certify the settlement class as defined in the Settlement Agreement; (c) approve the proposed class notice and notice plan as satisfying the requirements of due process and the California Rules of Court; (d) appoint Meridian Settlement Services LLC as the claims administrator; and (e) schedule a final approval hearing at the earliest date convenient to the Court, approximately ninety (90) days following the entry of the Preliminary Approval Order.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed this 22nd day of September, 2023, in Los Angeles, California.
/s/ Renata Vasquez
________________________________________
RENATA VASQUEZ (SBN 224578) Partner, Calderwood & Harkness LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Counsel of Record for Defendant Aurelius Media Americas Inc.
Lead Case No.: | 22STCV38214
Consolidated with: | 22STCV39501
Assigned for All Purposes to: | Hon. Raymond Escobedo, Dept. 34
Component | Amount
Attorneys' Fees (33.33% of GSA) | $4,916,175.00
Litigation Costs Reimbursement | $412,300.00
Class Representative Service Awards (Total) | $35,000.00
— Marisol Fuentes | $15,000.00
— Derek Halloran | $10,000.00
— Yesenia Padilla | $10,000.00
Settlement Administration Costs (Meridian Settlement Services LLC) | $385,000.00
PAGA Payment (Total) | $750,000.00
— 75% to LWDA | $562,500.00
— 25% to Aggrieved Employees | $187,500.00
Net Settlement Fund (NSF) | $8,251,525.00
Event | Proposed Date
Settlement Agreement Execution | September 15, 2023 (completed)
Preliminary Approval Motion (this motion) | September 22, 2023
Preliminary Approval (requested) | October 2023
Class Notice Mailing (by Meridian Settlement Services LLC) | Within 30 days of Preliminary Approval Order
Opt-Out / Objection Deadline | 60 days after Class Notice mailing
Motion for Final Approval and Fee Petition | Filed no later than 14 days before Final Approval Hearing
Final Approval Hearing | Approximately 90 days after Preliminary Approval Order
Distribution of Settlement Payments | Within 30 days of Final Approval Order becoming final

SUPERIOR COURT OF THE STATE OF CALIFORNIA

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