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,
Defendant.
JOINT MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
[Filed Concurrently with Declarations of Angela Truong, Devon Archer, and Supplemental Declaration of Renata Vasquez; Response to Class Member Objections; and [Proposed] Final Approval Order and Judgment]
Right-click to update Table of Contents
I. INTRODUCTION
Plaintiffs Marisol Fuentes, Derek Halloran, and Yesenia Padilla ("Plaintiffs" or "Class Representatives"), by and through their counsel of record, Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC ("Class Counsel"), and Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant"), by and through its counsel of record, Calderwood & Harkness LLP ("Defense Counsel"), hereby jointly move this Court for final approval of the Class Action Settlement Agreement and Release dated September 15, 2023 (the "Settlement Agreement" or "Settlement"), which was preliminarily approved by this Court on October 18, 2023.
The Settlement resolves all class and PAGA representative claims asserted in this consolidated wage-and-hour class action. The Gross Settlement Amount is $14,750,000, which is entirely non-reversionary — meaning that every dollar of the Settlement fund will be distributed to the class, to the Labor and Workforce Development Agency ("LWDA"), or applied toward attorneys' fees, costs, service awards, and settlement administration expenses. No portion of the Settlement fund will revert to AMA under any circumstances.
The Settlement was the product of vigorous, arm's-length negotiations between experienced counsel. The parties reached the Settlement after two full-day mediation sessions — the first on August 25, 2023 and the second on September 8, 2023 — before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., a retired Los Angeles Superior Court Judge with over twenty-five years of experience on the bench, including extensive experience mediating complex employment class actions.
The Settlement was preceded by extensive litigation activity spanning nearly a year. Discovery included the production of 147,832 documents (approximately 1.2 million pages) by AMA, encompassing timekeeping records, payroll data, employee handbooks, meal and rest break policies, production schedules, call sheets, and internal communications. Plaintiffs produced 3,412 documents. The parties conducted eighteen depositions — eleven by Plaintiffs and seven by Defense — including depositions of the named plaintiffs, AMA's Person Most Knowledgeable witnesses, AMA's President, and third-party custodians at NovaPay Solutions Inc. The parties exchanged three expert reports: Plaintiffs' damages expert, Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, opined on aggregate damages of $38.6 million (including $12.2 million in PAGA penalties); Defense expert Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC provided analysis of the variability of working conditions across AMA's seven California production facilities and fourteen show units; and Defense rebuttal damages expert Dr. Catherine Lindstrom of Hargrove Analytics Inc. opined on aggregate damages of $5.8 million. The parties also fully briefed and argued a contested motion for class certification.
On August 11, 2023, this Court entered its order on class certification, granting certification in part and denying it in part. Specifically, the Court certified the first meal period auto-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 denied certification of the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims. The PAGA representative claims, as the Court noted, proceed as representative actions without need for class certification.
In addition to resolving the certified claims, the Settlement also resolves all non-certified claims — including the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims — and all PAGA representative claims. The Gross Settlement Amount reflects the global value of all claims as negotiated at arm's length during mediation.
The notice process has been completed, and the reaction of the class overwhelmingly supports the Settlement. Of the approximately 1,850 class members, 1,262 submitted valid claims — a claims rate of 68.2%, which is dramatically higher than the average claims rate of 10–30% typically seen in California wage-and-hour class action settlements. Only 23 class members opted out of the Settlement, representing 1.24% of the class — far below the 5% threshold that would trigger AMA's contractual right to void the Settlement. Only four objections were received, none of which raises a substantive concern warranting denial of final approval. The objections are addressed in detail in the concurrently filed Response to Class Member Objections and summarized in Section IV.D below.
For the reasons set forth herein, the Settlement is fair, adequate, and reasonable within the meaning of California law. The parties respectfully request that the Court enter the Final Approval Order and Judgment.
II. PROCEDURAL HISTORY
A. Filing and Consolidation
On November 1, 2022, Plaintiff Marisol Fuentes filed the initial complaint in this action (Case No. 22STCV38214) in the Superior Court of the State of California, County of Los Angeles. The complaint alleged multiple causes of action under the California Labor Code, the applicable Industrial Welfare Commission Wage Order, and the Unfair Competition Law, on behalf of Ms. Fuentes and a putative class of non-exempt, hourly employees of AMA who were subject to the company's automatic meal period deduction policy in the NovaPay Solutions TimeTrack Pro timekeeping system.
On November 18, 2022, Plaintiff Derek Halloran filed a related complaint (Case No. 22STCV39501) asserting substantially identical claims on behalf of himself and a putative class. The Halloran complaint was noticed as related to the Fuentes action, and the two cases were assigned to the same department.
On February 3, 2023, after full briefing by the parties, the Court entered an order consolidating the Fuentes and Halloran actions under California Code of Civil Procedure section 1048. The Court designated Case No. 22STCV38214 as the lead case and assigned the consolidated matter to the Honorable Raymond Escobedo, Department 34, for all purposes. The Consolidated Amended Complaint, filed the same day, added Yesenia Padilla as a named plaintiff and asserted all claims on behalf of the three named plaintiffs and the putative class.
On February 17, 2023, AMA filed its Answer and Affirmative Defenses to the Consolidated Amended Complaint. AMA's answer asserted numerous affirmative defenses, including compliance with all applicable wage-and-hour laws, bona fide dispute, good faith, individual variation among class members, lack of commonality, and the absence of a uniform policy or practice giving rise to class-wide liability. AMA denied all material allegations and denied liability in its entirety.
B. Discovery
The parties engaged in extensive fact and expert discovery over approximately seven months, from late 2022 through mid-2023. Discovery was hard-fought, involving multiple meet-and-confer sessions and two discovery motions (both resolved by stipulation before hearing).
On January 13, 2023, the parties entered into a comprehensive ESI Protocol Stipulation governing the collection, review, and production of electronically stored information, including search terms, file types, custodians, and production formats.
AMA produced a total of 147,832 documents, comprising approximately 1.2 million pages of material. The production included timekeeping records from NovaPay Solutions Inc.'s "TimeTrack Pro" system, payroll data and wage statements, employee handbooks and personnel policies, meal and rest break policies in effect during the class period, production schedules and daily call sheets from AMA's fourteen show units operating across seven California production facilities, internal communications (including email, Meridian Solutions messages, and memoranda), training materials, and corporate policy memoranda concerning the auto-deduction feature and the Missed Meal Attestation functionality.
Plaintiffs produced 3,412 documents, including personal records, correspondence with supervisors and HR personnel, photographs, and contemporaneous notes maintained by the named plaintiffs.
A third-party subpoena was served on NovaPay Solutions Inc. for payroll and timekeeping records, system configuration data, and documentation regarding the TimeTrack Pro system's auto-deduction and Missed Meal Attestation features. Marcus Yee, Director of Client Data Services at NovaPay Solutions Inc., was designated as the custodian of records for these materials and subsequently sat for a deposition.
In total, eighteen depositions were taken during the course of the litigation — eleven by Plaintiffs and seven by Defense. The deponents included:
• The three named plaintiffs: Marisol Fuentes, Derek Halloran, and Yesenia Padilla;
• AMA's designated Person Most Knowledgeable witnesses: Lorraine Okafor (Senior Vice President, Human Resources), Celine Arroyo (Director of Production Operations), and Karen Fong (Payroll Manager);
• AMA's President, Jonathan Mercer;
• Marcus Yee (NovaPay Solutions Inc., Director of Client Data Services);
• Additional production managers and former employees across multiple AMA California facilities, including supervisory and non-supervisory personnel from the Unscripted Programming, Digital Content, and Live Events Divisions.
The parties utilized Marlowe Asset Management Litigation Technology Inc. as the e-discovery vendor for document hosting, review, and production. Seven key AMA custodians were identified and whose documents were collected, reviewed, and produced: Lorraine Okafor (SVP, Human Resources), Hiroshi Tanaka (VP, Legal & Compliance), Marcus Yee (NovaPay), Jonathan Mercer (President), Celine Arroyo (Director of Production Operations), Dwayne Prescott (VP, Unscripted Programming), and Karen Fong (Payroll Manager).
C. Expert Reports
On April 28, 2023, Plaintiffs' expert, Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, issued his comprehensive damages report. Dr. Rennick analyzed the approximately 12 million punch records from the TimeTrack Pro system during the class period, payroll data, and AMA's meal and rest break policies to calculate aggregate class-wide damages. Dr. Rennick opined that the total aggregate damages were $38.6 million, including approximately $12.2 million in PAGA penalties under Labor Code sections 2698–2699.8. Dr. Rennick's analysis included calculations for each category of claim alleged in the Consolidated Amended Complaint, including meal period premiums, rest period premiums, off-the-clock and overtime wages, minimum wage violations, waiting time penalties, wage statement penalties, and UCL restitution.
On May 19, 2023, Defense expert Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC issued his report addressing the variability of working conditions across AMA's seven California production facilities and fourteen show units. Dr. Makhija's report was based on his review of AMA's policies, employee declarations, deposition testimony, production schedules, and call sheets. Dr. Makhija opined that the working conditions, scheduling practices, supervisory structures, and meal and rest break customs varied significantly across facilities and show units, such that individual issues predominated over common questions and class-wide treatment was inappropriate for certain claims.
On June 9, 2023, Defense rebuttal damages expert Dr. Catherine Lindstrom of Hargrove Analytics Inc. issued her rebuttal damages report. Dr. Lindstrom conducted an independent analysis of the TimeTrack Pro data and payroll records and opined that the aggregate damages were $5.8 million — substantially lower than Dr. Rennick's figure. Dr. Lindstrom's analysis differed from Dr. Rennick's principally with respect to: (a) the treatment of voluntary meal period waivers; (b) the interpretation of the auto-deduction system's interaction with manual meal period entries; (c) the appropriate methodology for calculating off-the-clock and overtime damages; and (d) the appropriate PAGA penalty calculation.
D. Class Certification
On April 14, 2023, Plaintiffs filed their motion for class certification pursuant to California Code of Civil Procedure section 382. The motion was supported by the declarations of the three named plaintiffs, the report of Dr. Rennick, and documentary evidence from AMA's production.
On June 16, 2023, AMA filed its opposition to class certification. The opposition was supported by the declarations of Lorraine Okafor (SVP, Human Resources), Celine Arroyo (Director of Production Operations), Karen Fong (Payroll Manager), Dr. Rajesh Makhija, and Dr. Catherine Lindstrom. AMA argued that Plaintiffs had failed to establish commonality and predominance with respect to the majority of the claims, citing the significant variation in working conditions, scheduling practices, and supervisory customs across AMA's seven California production facilities and fourteen show units.
On July 7, 2023, Plaintiffs filed their reply in support of class certification.
On July 28, 2023, the Court held a hearing on the motion for class certification. The hearing lasted approximately three hours, and counsel for both sides presented oral argument and responded to the Court's questions.
On August 11, 2023, the Court entered its order granting in part and denying in part Plaintiffs' motion for class certification. Specifically:
Certified Claims: The Court certified the following claims for class treatment: (1) the first meal period auto-deduction claim, finding that the automatic deduction policy was applied uniformly across all seven California facilities and raised a common question of whether the auto-deduction, combined with the inconsistent implementation of the Missed Meal Attestation feature, constituted a failure to provide compliant meal periods; (2) the derivative wage statement claim under Labor Code section 226, finding that the allegedly inaccurate recording of meal period time was susceptible to common proof; and (3) the UCL claim under Business and Professions Code section 17200, finding that the UCL claim was derivative of the certified meal period claim.
Denied Claims: The Court denied certification of the following claims: (1) the rest period claim, finding that rest period practices varied significantly across facilities and show units; (2) the off-the-clock/overtime claim, finding that the alleged off-the-clock work was highly individualized and not susceptible to common proof; (3) the minimum wage claim, finding insufficient evidence of a uniform policy or practice; (4) the second meal period claim, finding that the second meal period applied only to a subset of employees who worked shifts exceeding ten hours and that the practices varied by facility and show unit; and (5) the waiting time penalty claim, finding that the derivative nature of the claim required resolution of the underlying wage claims, which were not certified for class treatment.
PAGA Claims: The Court noted that the PAGA representative claims proceeded as representative actions under the Labor Code Private Attorneys General Act and did not require class certification.
E. Mediation and Settlement
Following the Court's class certification order, the parties agreed to participate in mediation before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Judge Okoro is a retired Los Angeles Superior Court Judge with over twenty-five years on the bench, including significant experience presiding over and mediating complex employment class actions and PAGA representative actions in the entertainment industry.
On August 25, 2023, the parties participated in the first mediation session, which lasted a full day (approximately eight hours). This first session focused on the class action claims. Although significant progress was made, the parties did not reach agreement on the first day.
On September 8, 2023, the parties returned for a second full-day mediation session (approximately eight hours), which addressed both the class claims and a related executive-level dispute. After extensive negotiations facilitated by Judge Okoro, the parties reached an agreement in principle on the material terms of the Settlement.
On September 15, 2023, the parties executed the Class Action Settlement Agreement and Release (the "Settlement Agreement"), a comprehensive document setting forth all terms and conditions of the Settlement, including the class definition, the Gross Settlement Amount, the allocation formula, the scope of the release, the notice plan, and the procedures for opt-outs, objections, and distribution.
F. Preliminary Approval
On September 22, 2023, Plaintiffs filed the Motion for Preliminary Approval of the Class Action Settlement, supported by the Declaration of Renata Vasquez of Calderwood & Harkness LLP (on behalf of AMA) and the Declaration of Marco Castellano of Castellano Byrne & Salas LLP (on behalf of Plaintiffs and the Settlement Class). The motion addressed the terms of the Settlement, the fairness of the proposed notice plan, the proposed claims administration process, and the qualifications of the proposed claims administrator, Meridian Settlement Services LLC.
On October 18, 2023, after review of the motion, supporting declarations, and the Settlement Agreement, the Court entered its Preliminary Approval Order. The Preliminary Approval Order: (1) provisionally certified the settlement class; (2) approved the proposed notice plan; (3) appointed Meridian Settlement Services LLC as the claims administrator; (4) set the deadline for opt-outs and objections as January 2, 2024; and (5) set the final approval hearing for February 2, 2024, at 8:30 a.m. in Department 34.
G. Notice and Claims Administration
In accordance with the Preliminary Approval Order, Meridian Settlement Services LLC (Angela Truong, principal contact; 1600 E. Fourth Street, Suite 240, Santa Ana, California 92701) commenced the notice process promptly following the Court's October 18, 2023 order.
On November 3, 2023, class notices were mailed by first-class mail to all 1,843 identified class members at their last known addresses, as derived from AMA's payroll and employment records maintained through NovaPay Solutions Inc. The class notice was a four-page document, printed on legal-sized paper and folded into a standard #10 envelope. It was written in plain English and also included a reference to a Spanish-language version available on the settlement website. The notice described the terms of the Settlement, the allocation formula, estimated individual payments, the procedures for submitting claims, opting out, or filing objections, and the date and location of the final approval hearing.
Concurrently with the mailing, Meridian activated a dedicated settlement website at www.AMAsettlement.com, which contained the full text of the Settlement Agreement, the class notice, frequently asked questions, a downloadable claim form, and contact information for Class Counsel and the claims administrator. A toll-free information line was also established.
The opt-out and objection deadline was January 2, 2024. The results of the notice and claims administration process are detailed in the Declaration of Angela Truong filed concurrently herewith and summarized in Section IV below.
III. TERMS OF THE SETTLEMENT
A. Class Definition
The Settlement Agreement defines the settlement class 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 October 31, 2023, who were subject to AMA's automatic meal period deduction in the NovaPay Solutions TimeTrack Pro timekeeping system."
The estimated class size is approximately 1,850 individuals. The class period runs from November 1, 2018 through October 31, 2023, as modified in the Settlement Agreement to reflect the full scope of the claims at issue.
Class membership is determined by reference to objective criteria — specifically, non-exempt hourly status, California employment, employment during the class period, and assignment to the TimeTrack Pro auto-deduction system — all of which can be verified through AMA's payroll and timekeeping records maintained by NovaPay Solutions Inc.
B. Gross Settlement Amount
The Gross Settlement Amount ("GSA") is $14,750,000. The GSA is entirely non-reversionary, meaning that no portion of the fund will revert to AMA under any circumstances. The GSA is inclusive of all payments, fees, costs, and allocations described below.
C. Allocations from the GSA
The Settlement Agreement provides for the following allocations from the Gross Settlement Amount:
The Net Settlement Fund of $8,251,525 will be distributed to participating class members (i.e., those who do not opt out) in accordance with the distribution formula described below.
D. Distribution Formula
The Net Settlement Fund will be distributed on a pro rata basis to all class members who do not opt out of the Settlement. The individual payment for each participating class member will be calculated using the following allocation formula:
• 60% of the Net Settlement Fund will be allocated based on the number of weeks worked by each class member during the class period (November 1, 2018 through October 31, 2023); and
• 40% of the Net Settlement Fund will be allocated based on the number of recorded overtime hours worked by each class member during the class period.
This allocation formula was negotiated at arm's length during the mediation and reflects the relative value of the claims at issue. The weeks-worked component captures the meal period and wage statement claims, which accrued on a weekly basis, while the overtime-hours component captures the off-the-clock and overtime claims, which were correlated with overtime work.
Based on the estimated class size of approximately 1,850 members, the estimated average individual payment is approximately $4,460 per class member ($8,251,525 ÷ 1,850 ≈ $4,460). Actual individual payments will vary based on each class member's weeks worked and overtime hours during the class period.
For tax purposes, settlement payments will be allocated as follows: 50% as wages (subject to applicable payroll tax withholding); 33.33% as interest and penalties (reported on IRS Form 1099); and 16.67% as non-wage damages (also reported on IRS Form 1099). This allocation was reviewed and approved by Class Counsel's tax advisor and reflects the nature of the underlying claims.
E. Scope of Release
Upon final approval and entry of judgment, all participating class members (i.e., those who do not opt out) will release AMA and all related parties from all wage-and-hour claims arising from the operative facts alleged in the Consolidated Amended Complaint, including but not limited to:
Certified Claims:
• First meal period auto-deduction claim (failure to provide compliant first meal periods under Lab. Code §§ 226.7, 512);
• Derivative wage statement claim (Lab. Code § 226); and
• Unfair Competition Law claim (Bus. & Prof. Code § 17200).
Non-Certified Claims:
• Rest period claims (Lab. Code § 226.7);
• Off-the-clock overtime claims (Lab. Code §§ 510, 1194);
• Minimum wage claims (Lab. Code §§ 1197, 1197.1);
• Second meal period claims;
• Waiting time penalty claims (Lab. Code §§ 201–203).
PAGA Claims:
• All claims under the Labor Code Private Attorneys General Act (Lab. Code §§ 2698–2699.8).
Individual Claims:
• All individual claims that could have been asserted based on the facts alleged in the Consolidated Amended Complaint.
The released claims encompass all claims arising under the applicable Industrial Welfare Commission Wage Orders, primarily Wage Order 12 (Motion Picture Industry), which governs AMA's production operations. The release is comprehensive and reflects the global nature of the Settlement.
AMA admits no liability or wrongdoing in connection with the Settlement. The Settlement Agreement expressly provides that the Settlement is a compromise of disputed claims and that AMA denies all allegations of wrongdoing.
F. Cy Pres
Any settlement checks that remain uncashed after 180 days from the date of mailing will be void. The aggregate amount of uncashed checks will be donated as a cy pres distribution to the Legal Aid Foundation of Los Angeles, a qualified non-profit organization that provides free legal services to low-income individuals in Los Angeles County, including representation in wage-and-hour disputes. The cy pres recipient was selected because of its nexus to the subject matter of the litigation and the geographic area in which the class members worked and resided.
G. Opt-Out Threshold
The Settlement Agreement provides that if the number of valid opt-outs exceeds 5% of the total class membership — i.e., 93 or more individuals — AMA has the right, in its sole discretion, to void the Settlement. This threshold was included to protect AMA against a scenario in which a significant number of class members chose to pursue individual claims, thereby undermining the finality that the Settlement was designed to achieve.
As discussed in Section IV.C below, only 23 class members submitted valid opt-out requests, representing 1.24% of the class. This number is well below the 5% threshold, and AMA has not exercised — and will not exercise — its right to void the Settlement.
H. No Injunctive or Prospective Relief
The Settlement does not include injunctive or prospective relief. No such relief is necessary because AMA has already taken corrective action with respect to the practices at issue. Specifically, in December 2022 — prior to the commencement of formal settlement discussions — AMA corrected the auto-deduction threshold in the TimeTrack Pro system from six hours to five hours, consistent with the requirements of IWC Wage Order 12 (which triggers the first meal period obligation at the five-hour mark). Additionally, AMA activated the Missed Meal Attestation feature at all seven of its California production facilities, ensuring that employees who miss a meal period are prompted to record the missed period and receive a meal period premium. These corrections addressed the core systemic issues underlying Plaintiffs' claims.
IV. CLASS NOTICE AND RESPONSE
A. Notice Administration
The notice process was administered by Meridian Settlement Services LLC in strict compliance with the Court's October 18, 2023 Preliminary Approval Order and the notice plan set forth in the Settlement Agreement. The details of the notice administration are set forth in the Declaration of Angela Truong filed concurrently herewith, and the key facts are summarized as follows.
On November 3, 2023, Meridian mailed individual class notices by first-class United States mail to all 1,843 identified class members at their last known addresses. The mailing addresses were derived from AMA's payroll and employment records maintained through NovaPay Solutions Inc. The class notices were printed on legal-sized paper, written in plain language, and contained all information required by the Preliminary Approval Order, including: a description of the lawsuit and the claims at issue; a summary of the material terms of the Settlement; the estimated range of individual payments; instructions for submitting a claim; instructions for opting out; instructions for filing an objection; the deadline for claims, opt-outs, and objections (January 2, 2024); the date, time, and location of the final approval hearing (February 2, 2024, at 8:30 a.m. in Department 34); and the contact information for Class Counsel and the claims administrator.
Of the 1,843 notices mailed, seven were initially returned by the United States Postal Service as undeliverable. For each returned notice, Meridian conducted skip-tracing using the Halcyon Data Systems database to obtain updated addresses. All seven notices were subsequently re-mailed to the updated addresses, and none were returned a second time. As a result, all 1,843 class members received notice of the Settlement.
In addition to the direct mail notice, Meridian established a dedicated settlement website at www.AMAsettlement.com. The website contained the full text of the Settlement Agreement, the class notice, a downloadable claim form, a list of frequently asked questions and answers, a Spanish-language version of the notice, and contact information for Class Counsel and the claims administrator. The settlement website was visited a total of 2,847 times during the notice period.
Meridian also established a toll-free information line, which was staffed by trained representatives during business hours and included a recorded message available 24 hours a day. The toll-free line received a total of 312 calls during the notice period.
The notice process satisfied all requirements of due process and the Preliminary Approval Order.
B. Claims Data
As of the January 2, 2024 claims deadline, a total of 1,262 valid claims were submitted by class members. Based on the estimated class size of approximately 1,850 individuals, this represents a claims rate of 68.2%.
This claims rate is extraordinary by any measure. Empirical studies of class action settlements consistently report that claims rates in consumer and employment class actions typically range from approximately 10% to 30%. See, e.g., Federal Trade Commission, Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns (Sept. 2019) (reporting median claims rates of 4–9% in consumer class actions); see also Shannon R. Wheatman & Terri R. LeClercq, Majority of Class Action Publication Notices Fail to Satisfy Rule 23 Requirements, 30 Rev. Litig. 53, 55 (2010). The 68.2% claims rate here is more than double the high end of the typical range and reflects the robustness of the notice program, the clarity of the notice materials, and the broad awareness and support of the class for the Settlement.
The high claims rate also demonstrates that the class members — who are current and former employees of AMA with direct personal experience of the policies and practices at issue — view the Settlement as fair and valuable. The overwhelming response of the class is itself strong evidence that the Settlement merits final approval.
C. Opt-Outs
During the notice period, 23 valid opt-out requests were received by Meridian. This represents an opt-out rate of 1.24% of the approximately 1,850 class members.
There is no discernible pattern among the opt-outs. The 23 individuals who opted out come from multiple AMA facilities and show units, and no single attorney appears to be organizing or representing the opt-outs. The opt-out rate is far below the 5% threshold — 93 individuals — that would trigger AMA's contractual right to void the Settlement under Section 11.3 of the Settlement Agreement.
The minimal opt-out rate is a strong indicator that the class views the Settlement as fair and desirable. The overwhelming majority of class members have chosen to remain in the Settlement and participate in the distribution of the Net Settlement Fund.
D. Objections
A total of four objections were received during the notice period. Each objection is addressed in detail in the concurrently filed Response to Class Member Objections and is summarized below.
Objection 1: Carlos Vega
Carlos Vega is a former production assistant who worked at AMA Facility 3 (Sherman Oaks). Mr. Vega objects to the attorneys' fee percentage of 33.33%, arguing that fees should be limited to 25% of the Gross Settlement Amount.
Response: Mr. Vega's objection should be overruled. A fee award of 33.33% of the common fund is well within the range routinely approved by California courts under the percentage-of-fund method. In Laffitte v. Robert Half International Inc. (2016) 1 Cal.5th 480, 503–06, the California Supreme Court endorsed the percentage-of-fund method and recognized that fee awards ranging from 25% to 33.33% are typical in common fund class action cases. The 33.33% fee here is justified by the complexity of the litigation, the contingency risk assumed by Class Counsel (who invested substantial resources over more than a year with no guarantee of recovery), the exceptional result achieved for the class, the significant discovery and briefing undertaken, and the skill and diligence of Class Counsel. See also In re Consumer Privacy Cases (2009) 175 Cal.App.4th 545, 557 (affirming fee award of one-third of common fund).
Objection 2: Rachel Kimura
Rachel Kimura is a current production coordinator at AMA Facility 1 (West Hollywood). Ms. Kimura objects to the allocation formula, arguing that overtime hours should be weighted more heavily than 40%.
Response: Ms. Kimura's objection should be overruled. The 60/40 allocation formula — 60% based on weeks worked and 40% based on recorded overtime hours — was negotiated at arm's length during mediation and represents a reasonable compromise between the parties. The weeks-worked component reflects the fact that the core certified claim (the first meal period auto-deduction) accrued on a per-week basis and affected all class members equally, regardless of the number of overtime hours they worked. The overtime-hours component reflects the value of the off-the-clock and overtime claims, which were correlated with overtime work. The Court has broad discretion to approve the allocation formula, and the formula here is fair and reasonable. See, e.g., Wershba v. Computer, Inc. (2001) 91 Cal.App.4th 224, 245 (affirming trial court's approval of allocation formula in class action settlement).
Objection 3: Samuel Torres
Samuel Torres is a former segment coordinator who worked at AMA Facility 4 (Burbank). Mr. Torres objects that the settlement amount is too low, arguing that the class should have received at least $25 million.
Response: Mr. Torres's objection should be overruled. The $14,750,000 Gross Settlement Amount represents approximately 38.2% of Plaintiffs' expert's (Dr. Rennick's) aggregate damages estimate of $38.6 million and approximately 254% of Defense expert's (Dr. Lindstrom's) aggregate damages estimate of $5.8 million. The Settlement falls squarely within — and in fact at the upper end of — the range of reasonable outcomes for California wage-and-hour class action settlements, which typically settle for 15–40% of plaintiffs' claimed exposure. Moreover, the class certification order was partial: the Court denied certification of the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims, which would have constituted a significant portion of Plaintiffs' damages at trial. Significant litigation risk existed on both sides, as discussed in Section V.B below. The Settlement provides a certain, substantial recovery for the class while eliminating the risk and delay of continued litigation and trial. See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128 (a court evaluating a class action settlement should consider "the proportion of the class members who have reacted favorably to the proposed settlement, considered in the light of the apparent reasonableness of the settlement").
Objection 4: Dawn Prescott
Dawn Prescott is a former post-production assistant who worked at AMA Facility 7 (El Segundo). Ms. Prescott (who has no relation to AMA Vice President Dwayne Prescott) objects to the release of non-certified claims — specifically the rest period and off-the-clock claims — without separate compensation.
Response: Ms. Prescott's objection should be overruled. Broad releases encompassing non-certified claims are standard and routine in California wage-and-hour class action settlements. See, e.g., Villacres v. Northpoint Services Inc. (2010) 189 Cal.App.4th 562, 587–88 (approving settlement with broad release covering claims not asserted in the complaint). The Gross Settlement Amount of $14,750,000 reflects the value of all claims — including the non-certified claims — as negotiated at arm's length during two full-day mediation sessions before a retired superior court judge. The non-certified claims were specifically valued and accounted for in the overall settlement negotiations. Separate valuation and separate compensation for the non-certified claims would be impractical and inconsistent with the global nature of the Settlement. The broad release is a standard and reasonable term.
Request: All four objections should be overruled.
V. THE SETTLEMENT MERITS FINAL APPROVAL
A. Legal Standard
Under California law, a court must determine that a proposed class action settlement is "fair, adequate, and reasonable" before granting final approval. Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801; Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128. The court acts as a fiduciary for the absent class members and must independently evaluate the fairness of the settlement to ensure that it is in the best interests of the class as a whole. Kullar, 168 Cal.App.4th at 128.
In evaluating a proposed class action settlement, the court should consider the following factors, as articulated in Dunk and Kullar:
1. The strength of the plaintiffs' case on the merits balanced against the amount offered in settlement;
2. The risk, expense, complexity, and likely duration of further litigation;
3. The risk of maintaining class action status throughout trial;
4. The amount offered in settlement;
5. The extent of discovery completed and the stage of the proceedings;
6. The experience and views of counsel;
7. The presence of a governmental participant; and
8. The reaction of the class members to the proposed settlement.
Dunk, 48 Cal.App.4th at 1801; Kullar, 168 Cal.App.4th at 128. No single factor is dispositive, and the court must consider the totality of the circumstances. As set forth below, each of these factors weighs heavily in favor of final approval.
B. Factor 1: Strength of Case vs. Amount Offered
The first Dunk/Kullar factor requires the Court to evaluate the strength of Plaintiffs' case on the merits and balance it against the amount offered in settlement. This factor weighs strongly in favor of approval.
Plaintiffs' claimed aggregate damages, as calculated by Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, total $38.6 million, including approximately $12.2 million in PAGA penalties. Defense rebuttal damages expert Dr. Catherine Lindstrom of Hargrove Analytics Inc. calculated aggregate damages of $5.8 million.
The Gross Settlement Amount of $14,750,000 represents approximately 38.2% of Plaintiffs' claimed exposure — placing the Settlement squarely at the upper end of the typical 15–40% recovery range for California wage-and-hour class action settlements. Measured against Defense expert's damages estimate, the GSA represents approximately 254% of the defense-side valuation, further demonstrating the strength of the settlement.
However, the Settlement also appropriately accounts for the significant litigation risks faced by both sides. The Court's August 11, 2023 certification order was partial — the Court denied certification of the rest period, off-the-clock/overtime, minimum wage, second meal period, and waiting time penalty claims. These denied claims constituted a substantial portion of Plaintiffs' total claimed damages. Had the case proceeded to trial, Plaintiffs would have been limited to presenting only the certified claims (first meal period auto-deduction, derivative wage statement, and UCL) on a class-wide basis, which would have significantly reduced the potential class-wide recovery.
Even on the core certified claim — the first meal period auto-deduction — genuine risks existed for both sides:
Risks for Plaintiffs: AMA maintained facially compliant written meal and rest break policies. Under the controlling authority of Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, AMA's obligation was to provide meal periods — not to ensure that employees actually took them. AMA would have argued at trial that the auto-deduction system was merely a timekeeping mechanism, not a substantive denial of meal periods, and that employees who wished to record a missed meal period could do so through the Missed Meal Attestation feature, which was activated at four of AMA's seven California facilities (Facilities 1, 3, 5, and 6). AMA would also have argued that the 6-hour vs. 5-hour auto-deduction threshold discrepancy — while concededly an error in the system configuration — did not result in actual meal period violations because employees who worked shifts of 5 to 6 hours were either provided meal periods in practice or signed valid meal period waivers.
Risks for AMA: The auto-deduction system, combined with the inconsistent activation of the Missed Meal Attestation feature, presented significant vulnerabilities for AMA. The Missed Meal Attestation feature was deactivated at three of the seven California facilities — Facilities 2, 4, and 7 — during portions of the class period. Even at the four facilities where the feature was activated, usage rates were extremely low, ranging from approximately 2% to 4% of eligible shifts. AMA could not locate any formal training materials instructing employees on how to use the Missed Meal Attestation feature. And the 6-hour vs. 5-hour auto-deduction threshold discrepancy — which meant that employees working shifts of 5 to 6 hours received an automatic deduction for a meal period that they were not required to take under Wage Order 12 — was difficult to explain and created a strong inference of a systemic policy of underpaying meal period premiums.
In light of these competing risks, the Settlement provides the class with a certain, substantial recovery while eliminating the uncertainty and expense of trial on both sides. The amount offered is fair, reasonable, and at the upper end of the range of comparable settlements.
C. Factor 2: Risk, Expense, Complexity, and Duration of Further Litigation
The second factor considers the risk, expense, complexity, and likely duration of further litigation if the Settlement is not approved. This factor weighs strongly in favor of approval.
Had the case proceeded to trial, the litigation would have been protracted, expensive, and uncertain. AMA's estimated additional defense costs through trial were $1,200,000 to $1,800,000. Class Counsel's additional costs would have been comparable. Trial would have been lengthy — estimated at 15 to 20 court days — and exceedingly complex, requiring testimony from dozens of witnesses across AMA's seven California production facilities and fourteen show units, including the named plaintiffs, AMA management witnesses, third-party timekeeping witnesses, and multiple experts.
AMA maintained vigorous defenses throughout the litigation. In particular, AMA argued — supported by the expert analysis of Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC — that working conditions, scheduling practices, supervisory structures, and meal and rest break customs varied significantly across AMA's facilities and show units. These arguments, if credited by a jury, could have resulted in a defense verdict or a significantly reduced damages award.
Even if Plaintiffs prevailed at trial, post-trial motions (including motions for judgment notwithstanding the verdict, new trial, and decertification) and a potential appeal would have added years to the resolution timeline. The appellate process alone typically takes 18 to 24 months, and the California Courts of Appeal have been active in reviewing class action judgments in wage-and-hour cases. The Settlement provides prompt relief to class members, with distribution expected to commence within weeks of final approval.
D. Factor 3: Risk of Maintaining Class Status
The third factor considers the risk of maintaining class action status through trial. This factor weighs in favor of approval.
The Court's August 11, 2023 certification order was partial, and the certified claims remained subject to potential decertification at any time under California Code of Civil Procedure section 382. AMA had preserved its arguments for decertification based on individual variation across facilities and show units and manageability concerns that could have arisen during trial. The risk of decertification was real — particularly in light of the individualized nature of the evidence regarding the Missed Meal Attestation feature's availability and usage across facilities.
The Settlement eliminates the risk of decertification entirely. By resolving the claims on a class-wide basis through settlement, the class members are assured of receiving a recovery, regardless of whether the certified claims could have been maintained through trial.
E. Factor 4: Amount Offered
The fourth factor considers the amount offered in settlement. This factor weighs strongly in favor of approval.
The Gross Settlement Amount of $14,750,000 is substantial by any measure. The Net Settlement Fund — the amount available for distribution to class members after deduction of attorneys' fees, costs, service awards, settlement administration expenses, and the PAGA payment — is $8,251,525. Based on the estimated class size of approximately 1,850 members, the estimated average individual payment is approximately $4,460 per class member.
Individual payments will be calculated based on the 60/40 allocation formula (60% weeks worked, 40% overtime hours), ensuring that employees with greater exposure — i.e., those who worked more weeks and more overtime hours during the class period — receive proportionally larger payments. This approach fairly accounts for the varying degrees of harm suffered by individual class members.
The PAGA component of the Settlement is $750,000, which will be allocated 75% to the LWDA ($562,500) and 25% to the aggrieved employees ($187,500). The PAGA payment is reasonable in light of several considerations: (a) Plaintiffs' expert, Dr. Rennick, calculated total PAGA penalties of approximately $12.2 million, but this figure assumed that the maximum statutory penalty would be imposed for each violation — a result that is highly unlikely at trial, where the Court has broad discretion to reduce PAGA penalties under Labor Code section 2699(e)(2); (b) AMA's defenses to the PAGA claims, including the argument that many of the alleged violations were isolated incidents rather than systematic policies or practices, would have significantly reduced the PAGA exposure; and (c) the $750,000 PAGA payment is consistent with comparable PAGA settlements in California wage-and-hour cases involving employers of similar size.
F. Factor 5: Extent of discovery and Stage of Proceedings
The fifth factor considers the extent of discovery completed and the stage of the proceedings at the time of settlement. This factor weighs strongly in favor of approval.
The Settlement was reached after extensive investigation and discovery, ensuring that the parties and their counsel were fully informed of the strengths and weaknesses of their respective positions at the time they negotiated the Settlement. The scope of the parties' discovery efforts is detailed in Section II.B above and included:
• Production of 147,832 documents (approximately 1.2 million pages) by AMA, encompassing timekeeping records, payroll data, employee handbooks, meal and rest break policies, production schedules, call sheets, and internal communications;
• Production of 3,412 documents by Plaintiffs;
• Eighteen depositions, including depositions of the named plaintiffs, AMA's Person Most Knowledgeable witnesses, AMA's President, third-party custodians, and additional production managers and former employees;
• Three expert reports: Plaintiffs' damages report (Dr. Rennick, Pinnacle Economic Consulting Group LLC), Defense variability report (Dr. Makhija, Workforce Dynamics Consulting LLC), and Defense rebuttal damages report (Dr. Lindstrom, Hargrove Analytics Inc.);
• Full briefing and hearing on a contested motion for class certification, resulting in the Court's August 11, 2023 order; and
• Two full-day mediation sessions before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc.
The class period spans November 1, 2018 through October 31, 2023. The primary evidence at issue included approximately 12 million punch records from the NovaPay Solutions TimeTrack Pro timekeeping system; AMA's meal and rest break policies in effect during the class period; the employee handbook (revised March 2021); and production schedules and call sheets from AMA's fourteen show units operating across seven California production facilities.
By the time the parties entered mediation in August 2023, all fact and expert discovery had been completed, the class certification motion had been fully briefed and decided, and both sides had a comprehensive understanding of the facts, the legal issues, and the range of possible outcomes at trial. The Settlement was not the product of premature compromise; it was the result of fully informed, arm's-length negotiation.
G. Factor 6: Experience and Views of Counsel
The sixth factor considers the experience and views of counsel. This factor weighs in favor of approval.
Class Counsel are experienced practitioners who specialize in wage-and-hour class actions and PAGA representative actions. Castellano Byrne & Salas LLP, which serves as lead counsel for the Settlement Class, is led by founding partner Marco Castellano and partner Diane Salas. The firm specializes in wage-and-hour class actions and PAGA representative actions in the entertainment and hospitality industries and has served as class counsel in numerous certified class actions in California state and federal courts. Associate Trevor Kim assisted in all aspects of the litigation, including discovery, deposition preparation, briefing, and mediation. Co-counsel Veltrano Employment Law Group PC, led by partner Sandra Higuera, specializes in PAGA claims and Labor Code section 226 derivative claims and brought particular expertise in the statutory framework governing the PAGA component of this action.
Defense Counsel are similarly experienced. Calderwood & Harkness LLP is a national law firm with a substantial employment litigation practice. Responsible partner Renata Vasquez and billing partner Bernard Crawford supervised the defense of this action, with lead associate Devon Archer and working associate Nadia Petrov handling the day-to-day litigation. Calderwood & Harkness's offices are located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017.
All counsel on both sides endorse the Settlement as fair, reasonable, and adequate. The Declaration of Marco Castellano, filed with the Preliminary Approval Motion on September 22, 2023, describes Class Counsel's investigation, discovery efforts, and assessment of the Settlement. The Declaration of Renata Vasquez, filed with the Preliminary Approval Motion and supplemented on January 30, 2024, confirms AMA's endorsement of the Settlement and provides additional information regarding AMA's corrective actions and the Settlement funding arrangements.
The mediator, the Honorable Patricia Okoro (Ret.), participated in two mediation sessions totaling approximately sixteen hours and facilitated the parties' negotiations. Judge Okoro's involvement as a neutral adds further assurance that the Settlement was reached through a fair and arm's-length process.
The views of experienced counsel — and the endorsement of a highly respected retired jurist who facilitated the negotiation — constitute strong evidence that the Settlement is fair, adequate, and reasonable.
H. Factor 7: Governmental Participant
The seventh factor considers the presence of a governmental participant, which is relevant here because of the PAGA component of the Settlement.
Plaintiffs filed the required PAGA notice with the Labor and Workforce Development Agency on September 15, 2022, in accordance with Labor Code section 2699.3. The LWDA's response deadline was November 14, 2022. The LWDA took no action in response to the notice and did not elect to investigate the claims or intervene in the action.
Under the Settlement, the PAGA payment of $750,000 will be allocated 75% to the LWDA ($562,500) and 25% to the aggrieved employees ($187,500), in accordance with Labor Code section 2699(i). The LWDA has not objected to the Settlement, including the PAGA allocation. The absence of any objection or intervention by the LWDA supports the conclusion that the Settlement, including the PAGA component, is fair and reasonable.
I. Factor 8: Reaction of the Class
The eighth and final factor considers the reaction of the class members to the proposed settlement. This factor weighs overwhelmingly in favor of approval.
The reaction of the class is among the strongest evidence of a settlement's fairness. See, e.g., Wershba v. Computer, Inc. (2001) 91 Cal.App.4th 224, 245; 7-Eleven Owners for Fair Franchising v. Southland Corp. (2000) 85 Cal.App.4th 1135, 1163–64. Here, the class reaction is exceptionally positive:
• Claims rate: 68.2% — 1,262 of approximately 1,850 class members submitted valid claims. This rate is significantly above the average for California wage-and-hour class settlements, which typically range from 10% to 30%, and reflects strong class awareness of and support for the Settlement.