objections-opt-outs-analysis-memo.docx

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

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CALDERWOOD & HARKNESS LLP Attorneys at Law 633 West Fifth Street, Suite 4200 Los Angeles, California 90071 Telephone: (213) 555-8400 Facsimile: (213) 555-8401

CONFIDENTIAL — ATTORNEY WORK PRODUCT PRIVILEGED AND CONFIDENTIAL — PREPARED IN ANTICIPATION OF LITIGATION

MEMORANDUM

TO: Renata Vasquez

FROM: Nadia Petrov

DATE: January 8, 2024

RE: Analysis of Objections and Opt-Outs Received — Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated), C&H Matter No. 1017-00004

I. Executive Summary

The opt-out and objection deadline expired on January 2, 2024, pursuant to the Preliminary Approval Order entered by the Honorable Raymond Escobedo on October 18, 2023. The claims administrator, Meridian Settlement Services LLC (primary contact: Angela Truong, 1600 E. Fourth Street, Suite 240, Santa Ana, CA 92701; telephone: (714) 555-2100), has compiled the final data concerning class member responses during the notice period. This memorandum summarizes and analyzes that data, with particular attention to the objections filed, and provides recommendations for the upcoming Motion for Final Approval.

The high-level data summary is as follows:

The bottom-line assessment is that none of the opt-outs or objections presents a material obstacle to final approval. The opt-out rate of 1.24% is well below the 5% threshold that would trigger Aurelius Media Americas Inc.'s ("AMA") contractual right to void the settlement under the "blow" provision contained in Section 12.3 of the Settlement Agreement. The four objections received are individually manageable and collectively unremarkable — they raise standard concerns regarding attorneys' fees, allocation methodology, settlement adequacy, and scope of release, none of which warrants modification of the settlement terms or denial of final approval. The 68.2% claims rate is exceptionally strong and reflects broad class support for the settlement.

The data strongly supports proceeding with the filing of the Motion for Final Approval on January 22, 2024, and the scheduling of the Final Approval Hearing currently set for February 2, 2024, at 9:00 a.m. before the Honorable Raymond Escobedo in Department 34 of the Los Angeles Superior Court, Stanley Mosk Courthouse.

II. Notice Administration Summary

Class Notice was mailed on November 3, 2023, by Meridian Settlement Services LLC to 1,843 class members at their last known addresses. The mailing addresses were derived from employment records provided by AMA through its payroll vendor, NovaPay Solutions, and were cross-referenced against the United States Postal Service National Change of Address ("NCOA") database prior to the initial mailing to maximize deliverability.

Of the 1,843 notices mailed, seven (7) were returned by the USPS as undeliverable. Upon receipt of the returned notices, Meridian promptly conducted skip-tracing through the Halcyon Data Systems database and identified updated addresses for all seven individuals. Meridian re-mailed the Class Notice to the updated addresses for all seven class members within five business days of receiving the returned mail, consistent with the notice protocol approved by the Court. As of the date of this memorandum, none of the re-mailed notices has been returned as undeliverable.

In addition to direct mail notice, the Class Notice was posted on a dedicated settlement website administered by Meridian at www.FuentesAureliusSettlement.com. The website included the full text of the Class Notice, the Settlement Agreement, the Preliminary Approval Order, a downloadable claim form, a Frequently Asked Questions page, and contact information for class counsel and the claims administrator. The website received a substantial number of visits during the notice period; specific traffic data, including unique visitor counts, page views, and average time on site, will be provided in Angela Truong's declaration to be filed in support of the Final Approval Motion.

Meridian also maintained a toll-free information line (1-888-555-0147) that was operational throughout the entire notice period. The toll-free line provided recorded information regarding the settlement in both English and Spanish, with an option to speak with a live representative during business hours (Monday through Friday, 8:00 a.m. to 5:00 p.m. Pacific Time). Meridian reports that the information line received approximately 340 calls during the notice period, with approximately 85 callers electing to speak with a live representative.

The opt-out and objection deadline was January 2, 2024 — sixty (60) days from the date of the initial notice mailing on November 3, 2023. Opt-outs were required to be postmarked by January 2, 2024, and objections were required to be filed with the Court and served on class counsel and defense counsel by that same date. All opt-outs and objections discussed in this memorandum were timely received or postmarked on or before the January 2, 2024 deadline.

III. Opt-Out Analysis

A. Summary Statistics

The total number of valid opt-outs received by Meridian Settlement Services by the January 2, 2024 deadline is twenty-three (23). This represents 1.24% of the estimated class of approximately 1,850 individuals (23 ÷ 1,850 = 1.24%).

The Settlement Agreement, at Section 12.3 (the "blow" provision), provides that AMA shall have the unilateral right to void the settlement if the number of valid opt-outs equals or exceeds five percent (5%) of the total class membership — i.e., ninety-three (93) or more individuals. With only twenty-three opt-outs received, the actual opt-out count is far below the 5% threshold, representing less than one-quarter of the trigger number. Accordingly, AMA's right to void the settlement has not been triggered, and we do not anticipate any exercise or assertion of that right.

We have confirmed with opposing counsel, Greg Tanaka of Whitfield Baines & Tanaka LLP, that AMA does not intend to exercise any termination right based on the opt-out data. Mr. Tanaka confirmed this by email on January 5, 2024.

B. Pattern Analysis

We have reviewed the list of twenty-three opt-outs for any discernible patterns that might suggest a coordinated effort or concentrated dissatisfaction among a particular subgroup of the class. Our review reveals no such patterns.

The twenty-three opt-outs come from multiple AMA facilities and multiple show units, with no geographic or divisional concentration. Specifically, the opt-outs are distributed across at least six of AMA's eight production facilities in the greater Los Angeles area, including Facilities 1, 2, 3, 4, 6, and 7. No single facility accounts for more than five opt-outs. The opt-outs also span a range of job titles and classifications, including production assistants, segment coordinators, post-production assistants, and production coordinators, with no single job classification disproportionately represented.

No single attorney appears to be organizing or representing the opt-outs. All twenty-three opt-out requests appear to have been individually prepared and submitted. The opt-out letters do not share common language, formatting, or legal argumentation that would suggest coordination or the involvement of a competing plaintiffs' firm seeking to recruit class members for individual actions. Each opt-out letter is either handwritten or individually typed, and the stated reasons for opting out (where provided — not all opt-out letters include reasons) vary and include personal preferences, a desire to pursue individual claims, and general dissatisfaction with the settlement amount.

Importantly, no opt-out was submitted by any of the three named plaintiffs — Sofia Fuentes, Brian Halloran, or Marisol Padilla. This is consistent with expectations, as the named plaintiffs are the class representatives who have actively participated in the litigation and negotiation of the settlement, and who have negotiated individual service awards of $15,000 (Fuentes), $10,000 (Halloran), and $10,000 (Padilla), respectively, in recognition of their contributions to the prosecution of the action on behalf of the class.

C. Assessment. The opt-out rate of 1.24% is well below the average for California wage-and-hour class settlements, which typically range from approximately 1% to 5%, depending on the size and nature of the class and the settlement terms. An opt-out rate below 2% is generally regarded as a strong indicator of class support for the settlement and is a factor that courts consider in evaluating the fairness, reasonableness, and adequacy of a proposed settlement at the final approval stage. See, e.g., Wershba v. Computer, Inc. (2001) 91 Cal.App.4th 224, 244-245 (low opt-out rate supports finding that settlement is fair and reasonable).

No pattern or coordinated opt-out campaign is evident. There is no indication that any competing plaintiffs' firm or labor organization is soliciting opt-outs from class members or organizing resistance to the settlement.

The opt-outs do not materially affect the Net Settlement Fund ("NSF") calculation. Under the terms of the Settlement Agreement, class members who opt out are excluded from the class and receive no payment from the settlement, but their exclusion does not reduce the Gross Settlement Amount. The allocation formula distributes the NSF of $8,251,525 pro rata among participating class members based on their individual weeks worked and overtime hours. With twenty-three opt-outs, the effective participating class is approximately 1,827 members (assuming all remaining class members who did not opt out receive a pro rata distribution, whether or not they affirmatively submitted a claim form). The per-member allocation will be marginally higher as a result of the opt-outs, which modestly benefits the remaining class members.

In sum, the opt-out data presents no obstacle to final approval and, to the contrary, strongly supports the conclusion that the class views the settlement as fair and reasonable.

IV. Claims Data

As noted above, a total of 1,262 valid claims were submitted by class members out of an estimated class of approximately 1,850 individuals, resulting in a claims rate of 68.2%. This figure represents class members who affirmatively completed and submitted claim forms to Meridian Settlement Services by the January 2, 2024 deadline.

This is an exceptionally strong claims rate. In the context of California wage-and-hour class settlements, claims rates for claims-made settlements generally range from approximately 20% to 40%, with rates above 50% considered unusual and noteworthy. It should be noted that the settlement in this case employs a hybrid distribution model: all class members who do not opt out are entitled to receive a pro rata share of the NSF, regardless of whether they submit a claim form. However, the submission of a claim form facilitates the distribution process by confirming the class member's current mailing address and, where applicable, verifying identity and employment information. The high rate of affirmative claim submissions therefore reflects both active class engagement with the settlement and a high degree of awareness of the settlement terms, both of which are indicia of the adequacy of the notice program.

The high claims rate further supports the fairness and adequacy of the settlement. It indicates that a substantial majority of class members are aware of the settlement, understand its terms, and have elected to participate rather than opt out or remain passive. This level of engagement is particularly notable given the size and composition of the class, which includes both current and former employees of AMA spread across multiple production facilities throughout the greater Los Angeles metropolitan area.

The individual allocation formula for the distribution of the NSF operates as follows: sixty percent (60%) of each class member's individual allocation is based on the number of weeks worked during the class period (November 1, 2018 through October 31, 2023), and forty percent (40%) is based on the class member's recorded overtime hours during the same period. Meridian has calculated individual allocations for each participating class member based on payroll and timekeeping data extracted from NovaPay Solutions' TimeTrack Pro system, as provided by AMA pursuant to the terms of the Settlement Agreement and the Preliminary Approval Order. These individual allocation calculations will be summarized in Angela Truong's declaration supporting the Final Approval Motion, and a complete allocation schedule will be available for the Court's review upon request.

Based on preliminary calculations, the estimated average individual payment from the NSF is approximately $4,460 per class member ($8,251,525 ÷ 1,850), with individual amounts ranging from approximately $1,100 (for class members who worked a limited number of weeks during the class period and had few overtime hours) to approximately $12,800 (for long-tenured employees with significant overtime hours throughout the class period). These figures may adjust slightly as Meridian finalizes the allocation schedule and accounts for any remaining address issues or returned distribution checks.

V. Objection Analysis

A. Overview. A total of four (4) objections were received by the January 2, 2024 deadline. This represents an objection rate of 0.22% (4 ÷ 1,850), which is well below the typical range for wage-and-hour class settlements. Each objection is analyzed individually below.

In summary, none of the four objections presents a substantive concern that warrants modification of the settlement terms or denial of final approval. Three of the objections raise standard and well-worn issues — attorneys' fees, allocation methodology, and settlement adequacy — that are routinely addressed and overruled in class settlement proceedings. The fourth objection, concerning the scope of the release of non-certified claims, is more substantive and warrants a careful response, but is ultimately consistent with established California law and standard settlement practice.

B. Objection 1: Carlos Vega — Attorneys' Fees

Objector: Carlos Vega, former production assistant, assigned to Facility 3, located at 15301 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403.

Date of Objection: December 29, 2023 (filed with the Court and served on counsel).

Substance of Objection: Mr. Vega objects to the attorneys' fee percentage of 33.33% of the Gross Settlement Amount ($14,750,000 × 33.33% = $4,916,175), which he characterizes as "excessive" and "disproportionate to the work performed." Mr. Vega argues that attorneys' fees should be limited to 25% of the GSA, which he contends is a more appropriate benchmark. Mr. Vega states that he is "a hardworking employee who deserves more of the settlement money" and that "the lawyers are taking too much off the top." Mr. Vega's objection is pro se and approximately one page in length.

Assessment:

The 33.33% fee request is well within the range routinely approved by California courts for common fund class action settlements. The California Supreme Court in Laffitte v. Robert Half International Inc. (2016) 1 Cal.5th 480, 503-506, endorsed the percentage-of-fund method as the appropriate approach for calculating attorneys' fees in common fund cases and expressly recognized that one-third of the recovery is a "common benchmark" in such cases. Courts in the Central District of California and in the Los Angeles Superior Court have regularly approved fees of 33.33% in wage-and-hour class settlements of comparable size and complexity. See, e.g., Bellinghausen v. Tractor Supply Co. (C.D. Cal. 2015) 306 F.R.D. 245, 261 (approving 33.33% fee award in wage-and-hour class action); Vasquez v. Coast Valley Roofing, Inc. (2015) 266 Cal.App.4th 1167 (approving one-third fee in employment class action).

Moreover, the fee request is amply justified by the quality and quantity of work performed by class counsel. Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC, serving as co-lead class counsel, conducted extensive and contested litigation over approximately sixteen (16) months, including the following:

• Review and analysis of 147,832 documents produced by AMA in discovery, comprising approximately 1.2 million pages of payroll records, timekeeping data, meal period policies, employee handbooks, internal communications, and corporate policy memoranda;

• Production and review of 3,412 documents produced by Plaintiffs;

• Eighteen (18) depositions, including depositions of the three named plaintiffs, five AMA corporate designees pursuant to Code of Civil Procedure section 2025.230, four AMA facility managers, three AMA Human Resources representatives, two NovaPay Solutions representatives regarding the TimeTrack Pro auto-deduction functionality, and the parties' respective damages experts;

• Full class certification briefing, including an opening motion, opposition, reply, and supplemental briefing on the auto-deduction issue, culminating in a contested hearing before Judge Escobedo on August 4, 2023, and the Court's certification order dated August 11, 2023;

• Two full-day mediation sessions before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc. on September 8, 2023 and September 22, 2023, resulting in the settlement reached on September 22, 2023;

• Retention and coordination with Plaintiffs' damages expert, Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, who prepared a detailed damages model and expert report quantifying aggregate class damages at $38.6 million across all causes of action; and

• Extensive post-settlement work, including drafting the Settlement Agreement, preparing the Preliminary Approval Motion and supporting papers, drafting the Class Notice, coordinating with Meridian Settlement Services on the notice program, and responding to class member inquiries.

Class counsel's litigation costs of $412,300 are separately itemized in the fee petition and are subject to independent Court approval. These costs include expert fees, deposition costs, document management platform fees (Relativity), mediation fees, filing fees, service of process costs, and travel expenses.

The result achieved — a Gross Settlement Amount of $14,750,000, representing approximately 38.2% of the $38.6 million in claimed aggregate exposure — is a strong outcome for the class, particularly in light of the Court's partial certification order that limited the certified class to the first meal period auto-deduction claim and derivative wage statement and Unfair Competition Law claims. The partial certification ruling denied certification on five of seven causes of action, which significantly reduced Plaintiffs' litigation leverage and trial exposure. Against that backdrop, the $14,750,000 settlement represents a favorable recovery that reflects both the strength of the certified claim and a reasonable discount for the substantial litigation risks associated with the non-certified claims.

Mr. Vega's objection is standard in nature and is regularly overruled by courts in the context of class settlement proceedings. It does not identify any specific deficiency in class counsel's work or any particular basis for concluding that the fee is unreasonable beyond a generalized preference for a lower percentage. This objection should be overruled.

C. Objection 2: Rachel Kimura — Allocation Formula

Objector: Rachel Kimura, current production coordinator, assigned to Facility 1, AMA's West Hollywood headquarters located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, CA 90069.

Date of Objection: January 2, 2024 (filed with the Court and served on counsel on the last day of the objection period).

Substance of Objection: Ms. Kimura objects to the settlement allocation formula, specifically the 60/40 weighting between weeks worked during the class period and recorded overtime hours. Ms. Kimura argues that overtime hours should be weighted more heavily — she suggests at least 70% — because, in her view, employees who worked more overtime hours necessarily worked longer shifts and were therefore more likely to miss or have their meal periods interrupted or auto-deducted. Ms. Kimura states that she "regularly worked 12- to 14-hour shifts during sweeps periods" and believes that employees like her are being "shortchanged" by the current formula. Ms. Kimura's objection is pro se and approximately two pages in length, with detailed references to her own work schedule.

Assessment:

Ms. Kimura's argument has some logical appeal. It is intuitive that employees who worked longer shifts, as reflected in higher overtime hours, may have experienced a greater frequency of meal period violations, particularly in the context of AMA's auto-deduction policy under the NovaPay Solutions TimeTrack Pro system, which automatically deducted a 30-minute meal period from employees' recorded hours regardless of whether the meal period was actually taken. Employees working longer shifts may have been more likely to work through meal periods due to production demands, and the auto-deduction would have affected a greater number of their worked hours in absolute terms.

However, the 60/40 allocation formula was negotiated at arm's length between class counsel and defense counsel during the two mediation sessions facilitated by the Honorable Patricia Okoro (Ret.). The formula represents a carefully crafted compromise that balances competing considerations. The sixty percent (60%) weeks-worked component ensures that all class members receive meaningful compensation for each week of exposure during the five-year class period, recognizing that every class member who worked at least one shift per week was subject to the auto-deduction policy and is therefore entitled to a baseline allocation reflecting that exposure. The forty percent (40%) overtime component provides additional, differential compensation to employees who worked longer shifts, thereby acknowledging — consistent with Ms. Kimura's argument — that employees with more overtime hours likely experienced a greater impact from the auto-deduction policy.

The allocation formula does not need to be perfect — it must be fair, reasonable, and adequate under the circumstances. California courts afford substantial deference to allocation formulas negotiated at arm's length by experienced counsel. As the Court of Appeal explained in Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129, the role of the court in reviewing a class settlement is not to determine whether the settlement is the best possible outcome, but rather whether it falls within the range of reasonableness given the litigation risks and factual complexities of the case. This principle applies with equal force to the internal allocation methodology.

Moreover, there is no single "correct" weighting that can be derived from the available data. While overtime hours correlate with longer shifts, they do not perfectly track the incidence of meal period violations. Other factors — such as an employee's particular shift schedule, supervisor, department, and production cycle — also influenced the likelihood of a missed or interrupted meal period. The 60/40 formula is a reasonable approximation that captures the key variables without requiring individualized determinations that would be impractical and prohibitively costly to administer for a class of approximately 1,850 members.

This objection should be overruled. The allocation formula is fair, reasonable, and the product of informed, arm's-length negotiation.

D. Objection 3: Samuel Torres — Settlement Amount Too Low

Objector: Samuel Torres, former segment coordinator, assigned to Facility 4, located at 3800 W. Alameda Ave., Burbank, CA 91505.

Date of Objection: December 22, 2023 (filed with the Court and served on counsel).

Substance of Objection: Mr. Torres objects that the Gross Settlement Amount of $14,750,000 is "too low" and "doesn't come close to compensating what the company stole from us." Mr. Torres argues that the class should have received "at least $25 million" based on what he describes as "the true value of the claims." Mr. Torres references conversations with unnamed "colleagues" who share his view and states that "everyone knows the company made billions while shorting us on our breaks." Mr. Torres's objection is pro se and approximately one and one-half pages in length.

Assessment:

This is a standard "settlement is too low" objection that is routinely raised and routinely overruled in class settlement proceedings. While Mr. Torres's frustration is understandable, his objection does not identify any specific deficiency in the settlement negotiations, any error in the damages analysis, or any particular basis for concluding that a higher settlement amount could have been achieved through continued litigation.

The $14,750,000 Gross Settlement Amount represents 38.2% of Plaintiffs' expert Dr. Howard Rennick's aggregate damages calculation of $38.6 million. Dr. Rennick's calculation assumed liability on all seven causes of action asserted in the operative complaint. It also represents approximately 254% of the defense expert Dr. Catherine Lindstrom's (Hargrove Analytics Inc.) alternative damages calculation of $5.8 million, which assumed a substantially lower violation rate and applied a more conservative methodology for calculating premium pay.

The settlement was reached after extensive discovery, competing expert analyses, full class certification briefing, a contested certification hearing, and adversarial mediation before a highly experienced neutral. The settlement was not the product of pre-discovery or pre-certification negotiations; rather, it was reached only after the parties had fully developed the factual record and received a definitive ruling from the Court on class certification.

Critically, the Court's August 11, 2023 certification order significantly shaped the settlement landscape. Judge Escobedo granted certification on only two of the seven causes of action — the first meal period auto-deduction claim (First Cause of Action) and the derivative inaccurate wage statement claim (Sixth Cause of Action), as well as the UCL derivative claim (Seventh Cause of Action) — while denying certification on the remaining five causes of action:

1. Rest period violations (Second Cause of Action) — denied for lack of common proof of a uniform policy;

2. Off-the-clock/overtime violations (Third Cause of Action) — denied for predominance of individualized issues;

3. Minimum wage violations (Fourth Cause of Action) — denied as derivative of the overtime claim;

4. Second meal period violations (Fifth Cause of Action) — denied because the auto-deduction issue applied only to the first meal period; and

5. Waiting time penalties under Labor Code section 203 (derivative claim) — denied as dependent on the non-certified substantive claims.

This partial certification substantially discounted the value of the case relative to the full $38.6 million aggregate exposure. Had Plaintiffs proceeded to trial on only the certified claims, the maximum recoverable damages would have been significantly less than the $38.6 million figure — Dr. Rennick estimated the damages attributable solely to the certified first meal period claim and derivative claims at approximately $12.4 million. Against that figure, the $14,750,000 GSA represents a recovery of approximately 119% of the certified claim value — a result that reflects both the strength of the certified claim and an implicit premium attributable to the value of the non-certified claims being released.

The Net Settlement Fund of $8,251,525 yields an estimated average payment of approximately $4,460 per class member ($8,251,525 ÷ 1,850). Individual payments will vary based on weeks worked and overtime hours, with estimated payments ranging from approximately $1,100 to $12,800.

The settlement falls well within the range of reasonableness and was the product of informed, vigorous, arm's-length negotiation between experienced counsel. Mr. Torres has not identified any basis for concluding that a materially better result could have been achieved through continued litigation, particularly in light of the partial certification order. This objection should be overruled.

E. Objection 4: Dawn Prescott — Broad Release of Non-Certified Claims

Objector: Dawn Prescott (no relation to AMA Vice President of Human Resources Dwayne Prescott), former post-production assistant, assigned to Facility 7, located at 888 N. Sepulveda Blvd., El Segundo, CA 90245.

Date of Objection: December 28, 2023 (filed with the Court and served on counsel).

Substance of Objection: Ms. Prescott objects to the scope of the settlement release, which encompasses all wage-and-hour claims arising from the operative facts during the class period, including both the certified claims (first meal period auto-deduction, derivative wage statement violations, and UCL claims) and the non-certified claims (rest period violations, off-the-clock/overtime violations, minimum wage violations, second meal period violations, and waiting time penalties). Ms. Prescott argues that the class is "giving up valuable claims that the Court already said can't be certified as a class" and is "receiving no separate compensation for releasing those claims." Ms. Prescott further contends that "each of these claims has independent value" and that class members "should not be forced to release claims they never had the chance to litigate as a class." Ms. Prescott's objection is approximately three pages in length, is well-written, and cites several cases (though not always accurately). Ms. Prescott appears to be pro se but may have received legal guidance, as the objection is more polished and legally sophisticated than the other three objections.

Assessment:

This is the most substantive of the four objections and warrants a detailed and carefully articulated response, both in our written Response to Objections and at the Final Approval Hearing.

Ms. Prescott raises a legitimate concern about the breadth of the settlement release relative to the scope of class certification. It is true that the Court denied certification on five of seven causes of action, and it is true that the settlement release encompasses all seven causes of action (plus PAGA claims). However, this structure is both legally permissible and standard practice in California wage-and-hour class settlements, and the settlement consideration adequately reflects the value of the released claims.

Legal Framework. The California Court of Appeal has expressly approved broad releases in class settlements that extend beyond the certified claims, provided that the release is reasonably related to the claims at issue and the settlement consideration reflects the value of the released claims. In Villacres v. Northpoint Services Inc. (2010) 189 Cal.App.4th 562, 584, the Court of Appeal held that a settlement release encompassing claims beyond those specifically certified for class treatment is permissible where the released claims arise from the same factual predicate as the certified claims and the settlement consideration accounts for the released claims' value. The court recognized that "[a] class action settlement need not obtain an adjudication of every individual claim in order to provide a valid release of related claims, so long as the class members receive fair and adequate compensation."

Similarly, in Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801, the Court of Appeal recognized that the scope of a release in a class settlement is a factor to be considered in evaluating the overall fairness of the settlement, but does not independently render a settlement unfair where the release is accompanied by adequate consideration.

Settlement Consideration Reflects Released Claims. The GSA of $14,750,000 was negotiated with the non-certified claims squarely in mind. During the two mediation sessions before Judge Okoro, both sides acknowledged that the non-certified claims had value, notwithstanding the denial of class certification. Individual class members retain the right to pursue the non-certified claims on an individual basis, and the PAGA representative claim (which does not require class certification under the Private Attorneys General Act, Labor Code section 2698 et seq.) covers the same underlying violations as the non-certified class claims. Both of these factors gave Plaintiffs' counsel leverage during the settlement negotiations to demand — and obtain — a settlement amount that exceeds the value of the certified claims standing alone.

As discussed in the analysis of Mr. Torres's objection above, Dr. Rennick estimated the damages attributable solely to the certified first meal period claim and derivative claims at approximately $12.4 million. The $14,750,000 GSA exceeds that figure by $2,350,000 — a premium of approximately 19% — which reflects the additional value attributable to the non-certified claims being released. While no precise mathematical formula can disaggregate the consideration attributable to each released claim, the overall settlement amount plainly reflects the parties' recognition that the broad release has value and that the settlement consideration must account for it.

PAGA Component. Moreover, the PAGA component of the settlement provides an additional layer of compensation attributable to the broader range of violations, including those not certified for class treatment. The Settlement Agreement allocates $750,000 to the PAGA claim, of which seventy-five percent ($562,500) is paid to the California Labor and Workforce Development Agency ("LWDA") and twenty-five percent ($187,500) is distributed to aggrieved employees. The PAGA claim is not limited to the auto-deduction issue; it encompasses all alleged Labor Code violations, including rest period, overtime, minimum wage, and waiting time violations. The PAGA allocation therefore provides some compensation specifically attributable to the non-certified claims.

Practical Considerations. From a practical standpoint, the broad release was a bargained-for element of the settlement that was essential to AMA's willingness to agree to the $14,750,000 GSA. If the settlement did not include a release of the non-certified claims, AMA would face ongoing litigation risk from individual claims and potential future PAGA actions based on the same underlying wage-and-hour violations. AMA's counsel made clear during mediation that a settlement without a comprehensive release was not acceptable to AMA's management or its board of directors. Had Plaintiffs insisted on a narrower release limited to the certified claims, AMA would likely have offered a substantially lower settlement amount — potentially in the range of $8 million to $10 million, based on the mediation discussions — which would have resulted in materially lower individual payments to class members.

Recommendation. This objection should be overruled, but we should address it with particular care in our Response to Objections and in the Final Approval Motion. The Prescott objection raises a concern that Judge Escobedo may find worth discussing at the Final Approval Hearing, and we should be prepared to present a thorough oral argument explaining why the broad release is appropriate and adequately compensated. Our response should cite Villacres, Dunk, and other relevant authority, and should include a clear explanation of how the settlement amount reflects the value of the non-certified claims. We should also consider whether to include an additional paragraph in the Supplemental Vasquez Declaration specifically addressing the negotiation of the release scope and the consideration attributable to the non-certified claims.

VI. Comparative Analysis — Opt-Outs and Objections in Context

To place the opt-out and objection data in proper context, the following table compares the key metrics from this settlement to the typical ranges observed in California wage-and-hour class settlements, based on published case data and the experience of this firm:

Several observations merit emphasis. First, the opt-out rate of 1.24% is at the low end of the typical range, indicating that the overwhelming majority of class members have elected to remain in the class and receive the benefits of the settlement rather than preserve their right to pursue individual claims. Second, the objection rate of 0.22% is substantially below the typical range, suggesting that the class has very few substantive concerns about the settlement terms. Third, the claims rate of 68.2% is exceptionally high, even accounting for the pro rata distribution structure, and reflects a level of class engagement and awareness that courts regularly cite as evidence of the adequacy of the notice program and the fairness of the settlement.

Taken together, these metrics paint a clear picture: the class views the settlement as fair and acceptable. The low opt-out rate, minimal objection activity, and high claims rate are all strong indicators that the settlement has broad class support and is likely to receive final approval.

Courts in California have recognized that precisely these metrics are probative of a settlement's fairness. See, e.g., Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at 1801 (noting that the number and nature of objections is one factor in evaluating settlement fairness); Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at 133 (high participation rate and low opt-out rate support approval); Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394 (small number of objectors relative to class size favors approval).

VII. Recommendations

Based on the foregoing analysis, we make the following recommendations:

1. Proceed with Final Approval Motion. The opt-out and objection data strongly supports final approval. The opt-out rate is well below the contractual blow provision threshold, the objections are manageable, and the claims rate is exceptionally high. We recommend filing the Motion for Final Approval on January 22, 2024, as previously planned and consistent with the Court's Preliminary Approval Order briefing schedule.

2. Response to Objections. We should prepare and file a Response to Class Member Objections as a separate document on January 22, 2024, concurrently with the Final Approval Motion. The response should address each of the four objections individually. The Vega objection (attorneys' fees), Kimura objection (allocation formula), and Torres objection (settlement amount) can be addressed relatively briefly — approximately one to two pages each — as they raise standard issues for which there is ample supporting authority. The Prescott objection (broad release of non-certified claims) warrants a more detailed response of approximately three to four pages, given its greater substantive complexity and the likelihood that Judge Escobedo will inquire about this issue at the hearing.

3. Supporting Declarations. The Final Approval Motion should be supported by the following declarations:

(a) Declaration of Angela Truong (Meridian Settlement Services LLC) regarding the notice administration process, including details of the mailing, re-mailing of returned notices, settlement website traffic, toll-free line activity, opt-out and objection data, claims data, and the individual allocation calculations;

(b) Declaration of Devon Archer (AMA's designated representative for settlement implementation) regarding AMA's compliance with the settlement terms, including the provision of class member data, cooperation with Meridian on the notice program, and confirmation that AMA does not intend to exercise its termination right under Section 12.3 of the Settlement Agreement; and

(c) Supplemental Declaration of Renata Vasquez in Support of Final Approval, updating the September 22, 2023 declaration filed in support of the Preliminary Approval Motion with current data regarding opt-outs, objections, claims, and the overall status of the settlement. This supplemental declaration should include a specific discussion of the negotiation of the release scope and the consideration attributable to the non-certified claims, in order to provide a factual foundation for our response to the Prescott objection.

4. Final Approval Hearing. The Final Approval Hearing is currently scheduled for February 2, 2024, at 9:00 a.m. before the Honorable Raymond Escobedo in Department 34 of the Stanley Mosk Courthouse. We should prepare a detailed oral argument outline that addresses each of the four objections, emphasizes the strong class response data, and highlights the key factors supporting final approval under the Kullar and Dunk frameworks. We should be particularly prepared to address questions from Judge Escobedo regarding the Prescott objection and the scope of the release. I recommend scheduling an internal moot session on or about January 29, 2024, to prepare Renata and co-lead counsel for the hearing.

5. No Modification to Settlement Terms Required. Based on our review, none of the four objections warrants modification of any settlement term. The fee percentage of 33.33%, the 60/40 allocation formula, the Gross Settlement Amount of $14,750,000, and the scope of the release are all fair, reasonable, and consistent with California law and the realities of the litigation. We do not recommend any amendments to the Settlement Agreement.

6. Notify AMA. Greg Tanaka of Whitfield Baines & Tanaka LLP and Philippa Cartwright, AMA's General Counsel, should be formally advised of the final opt-out and objection results and our assessment that final approval is on track. Mr. Tanaka has already been informally apprised of the results via our January 5 email exchange, but a formal letter or email summarizing the data and our assessment would be appropriate. We should also confirm with Mr. Tanaka that AMA's designated representative, Devon Archer, is available to execute the supporting declaration and to appear at the Final Approval Hearing if requested by the Court.

VIII. Appendix / Attachments Reference

The following appendices are referenced in this memorandum and are attached hereto or will be provided under separate cover as indicated:

Appendix A: Summary of 23 Opt-Outs — includes names, assigned facilities, show units, job titles, and dates of opt-out letters. (To be provided by Meridian Settlement Services LLC upon finalization of the opt-out verification process; expected delivery: January 10, 2024.)

Appendix B: Full text of each of the 4 objections received, including the objections filed by Carlos Vega (December 29, 2023), Samuel Torres (December 22, 2023), Dawn Prescott (December 28, 2023), and Rachel Kimura (January 2, 2024). (Copies attached hereto.)

Appendix C: Meridian Settlement Services LLC interim report on notice administration and claims processing, dated January 5, 2024, prepared by Angela Truong. (Copy attached hereto.)

This memorandum is a confidential attorney work product prepared by Calderwood & Harkness LLP in anticipation of litigation and for the purpose of providing legal advice to counsel of record in Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214. This memorandum is protected by the attorney work product doctrine and the attorney-client privilege. Any disclosure, copying, or distribution of this memorandum or its contents without the express written consent of Calderwood & Harkness LLP is strictly prohibited.

Category	Count	Detail
Class Notices Mailed	1,843	7 returned as undeliverable; re-mailed to updated addresses via skip-tracing
Valid Opt-Outs Received	23	1.24% of estimated class of approximately 1,850
Objections Filed	4	Detailed analysis provided in Section V below
Valid Claims Submitted	1,262	68.2% claims rate (1,262 of 1,850 estimated class members)
Metric	This Settlement	Typical Range (CA Wage-and-Hour)
Opt-out rate	1.24% (23 of 1,850)	1–5%
Objection rate	0.22% (4 of 1,850)	0.5–3%
Claims rate	68.2% (1,262 of 1,850)	20–40% (claims-made); higher for pro rata distributions

CALDERWOOD & HARKNESS LLP Attorneys at Law 633 West Fifth Street, Suite 4200 Los Angeles, California 90071 Telephone: (213) 555-8400 Facsimile: (213) 555-8401
CONFIDENTIAL — ATTORNEY WORK PRODUCT PRIVILEGED AND CONFIDENTIAL — PREPARED IN ANTICIPATION OF LITIGATION
MEMORANDUM
TO: Renata Vasquez
FROM: Nadia Petrov
DATE: January 8, 2024
RE: Analysis of Objections and Opt-Outs Received — Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214 (Consolidated), C&H Matter No. 1017-00004
I. Executive Summary
The opt-out and objection deadline expired on January 2, 2024, pursuant to the Preliminary Approval Order entered by the Honorable Raymond Escobedo on October 18, 2023. The claims administrator, Meridian Settlement Services LLC (primary contact: Angela Truong, 1600 E. Fourth Street, Suite 240, Santa Ana, CA 92701; telephone: (714) 555-2100), has compiled the final data concerning class member responses during the notice period. This memorandum summarizes and analyzes that data, with particular attention to the objections filed, and provides recommendations for the upcoming Motion for Final Approval.
The high-level data summary is as follows:
The bottom-line assessment is that none of the opt-outs or objections presents a material obstacle to final approval. The opt-out rate of 1.24% is well below the 5% threshold that would trigger Aurelius Media Americas Inc.'s ("AMA") contractual right to void the settlement under the "blow" provision contained in Section 12.3 of the Settlement Agreement. The four objections received are individually manageable and collectively unremarkable — they raise standard concerns regarding attorneys' fees, allocation methodology, settlement adequacy, and scope of release, none of which warrants modification of the settlement terms or denial of final approval. The 68.2% claims rate is exceptionally strong and reflects broad class support for the settlement.
The data strongly supports proceeding with the filing of the Motion for Final Approval on January 22, 2024, and the scheduling of the Final Approval Hearing currently set for February 2, 2024, at 9:00 a.m. before the Honorable Raymond Escobedo in Department 34 of the Los Angeles Superior Court, Stanley Mosk Courthouse.
II. Notice Administration Summary
Class Notice was mailed on November 3, 2023, by Meridian Settlement Services LLC to 1,843 class members at their last known addresses. The mailing addresses were derived from employment records provided by AMA through its payroll vendor, NovaPay Solutions, and were cross-referenced against the United States Postal Service National Change of Address ("NCOA") database prior to the initial mailing to maximize deliverability.
Of the 1,843 notices mailed, seven (7) were returned by the USPS as undeliverable. Upon receipt of the returned notices, Meridian promptly conducted skip-tracing through the Halcyon Data Systems database and identified updated addresses for all seven individuals. Meridian re-mailed the Class Notice to the updated addresses for all seven class members within five business days of receiving the returned mail, consistent with the notice protocol approved by the Court. As of the date of this memorandum, none of the re-mailed notices has been returned as undeliverable.
In addition to direct mail notice, the Class Notice was posted on a dedicated settlement website administered by Meridian at www.FuentesAureliusSettlement.com. The website included the full text of the Class Notice, the Settlement Agreement, the Preliminary Approval Order, a downloadable claim form, a Frequently Asked Questions page, and contact information for class counsel and the claims administrator. The website received a substantial number of visits during the notice period; specific traffic data, including unique visitor counts, page views, and average time on site, will be provided in Angela Truong's declaration to be filed in support of the Final Approval Motion.
Meridian also maintained a toll-free information line (1-888-555-0147) that was operational throughout the entire notice period. The toll-free line provided recorded information regarding the settlement in both English and Spanish, with an option to speak with a live representative during business hours (Monday through Friday, 8:00 a.m. to 5:00 p.m. Pacific Time). Meridian reports that the information line received approximately 340 calls during the notice period, with approximately 85 callers electing to speak with a live representative.
The opt-out and objection deadline was January 2, 2024 — sixty (60) days from the date of the initial notice mailing on November 3, 2023. Opt-outs were required to be postmarked by January 2, 2024, and objections were required to be filed with the Court and served on class counsel and defense counsel by that same date. All opt-outs and objections discussed in this memorandum were timely received or postmarked on or before the January 2, 2024 deadline.
III. Opt-Out Analysis
A. Summary Statistics
The total number of valid opt-outs received by Meridian Settlement Services by the January 2, 2024 deadline is twenty-three (23). This represents 1.24% of the estimated class of approximately 1,850 individuals (23 ÷ 1,850 = 1.24%).
The Settlement Agreement, at Section 12.3 (the "blow" provision), provides that AMA shall have the unilateral right to void the settlement if the number of valid opt-outs equals or exceeds five percent (5%) of the total class membership — i.e., ninety-three (93) or more individuals. With only twenty-three opt-outs received, the actual opt-out count is far below the 5% threshold, representing less than one-quarter of the trigger number. Accordingly, AMA's right to void the settlement has not been triggered, and we do not anticipate any exercise or assertion of that right.
We have confirmed with opposing counsel, Greg Tanaka of Whitfield Baines & Tanaka LLP, that AMA does not intend to exercise any termination right based on the opt-out data. Mr. Tanaka confirmed this by email on January 5, 2024.
B. Pattern Analysis
We have reviewed the list of twenty-three opt-outs for any discernible patterns that might suggest a coordinated effort or concentrated dissatisfaction among a particular subgroup of the class. Our review reveals no such patterns.
The twenty-three opt-outs come from multiple AMA facilities and multiple show units, with no geographic or divisional concentration. Specifically, the opt-outs are distributed across at least six of AMA's eight production facilities in the greater Los Angeles area, including Facilities 1, 2, 3, 4, 6, and 7. No single facility accounts for more than five opt-outs. The opt-outs also span a range of job titles and classifications, including production assistants, segment coordinators, post-production assistants, and production coordinators, with no single job classification disproportionately represented.
No single attorney appears to be organizing or representing the opt-outs. All twenty-three opt-out requests appear to have been individually prepared and submitted. The opt-out letters do not share common language, formatting, or legal argumentation that would suggest coordination or the involvement of a competing plaintiffs' firm seeking to recruit class members for individual actions. Each opt-out letter is either handwritten or individually typed, and the stated reasons for opting out (where provided — not all opt-out letters include reasons) vary and include personal preferences, a desire to pursue individual claims, and general dissatisfaction with the settlement amount.
Importantly, no opt-out was submitted by any of the three named plaintiffs — Sofia Fuentes, Brian Halloran, or Marisol Padilla. This is consistent with expectations, as the named plaintiffs are the class representatives who have actively participated in the litigation and negotiation of the settlement, and who have negotiated individual service awards of $15,000 (Fuentes), $10,000 (Halloran), and $10,000 (Padilla), respectively, in recognition of their contributions to the prosecution of the action on behalf of the class.
C. Assessment.  The opt-out rate of 1.24% is well below the average for California wage-and-hour class settlements, which typically range from approximately 1% to 5%, depending on the size and nature of the class and the settlement terms. An opt-out rate below 2% is generally regarded as a strong indicator of class support for the settlement and is a factor that courts consider in evaluating the fairness, reasonableness, and adequacy of a proposed settlement at the final approval stage. See, e.g., Wershba v. Computer, Inc. (2001) 91 Cal.App.4th 224, 244-245 (low opt-out rate supports finding that settlement is fair and reasonable).
No pattern or coordinated opt-out campaign is evident. There is no indication that any competing plaintiffs' firm or labor organization is soliciting opt-outs from class members or organizing resistance to the settlement.
The opt-outs do not materially affect the Net Settlement Fund ("NSF") calculation. Under the terms of the Settlement Agreement, class members who opt out are excluded from the class and receive no payment from the settlement, but their exclusion does not reduce the Gross Settlement Amount. The allocation formula distributes the NSF of $8,251,525 pro rata among participating class members based on their individual weeks worked and overtime hours. With twenty-three opt-outs, the effective participating class is approximately 1,827 members (assuming all remaining class members who did not opt out receive a pro rata distribution, whether or not they affirmatively submitted a claim form). The per-member allocation will be marginally higher as a result of the opt-outs, which modestly benefits the remaining class members.
In sum, the opt-out data presents no obstacle to final approval and, to the contrary, strongly supports the conclusion that the class views the settlement as fair and reasonable.
IV. Claims Data
As noted above, a total of 1,262 valid claims were submitted by class members out of an estimated class of approximately 1,850 individuals, resulting in a claims rate of 68.2%. This figure represents class members who affirmatively completed and submitted claim forms to Meridian Settlement Services by the January 2, 2024 deadline.
This is an exceptionally strong claims rate. In the context of California wage-and-hour class settlements, claims rates for claims-made settlements generally range from approximately 20% to 40%, with rates above 50% considered unusual and noteworthy. It should be noted that the settlement in this case employs a hybrid distribution model: all class members who do not opt out are entitled to receive a pro rata share of the NSF, regardless of whether they submit a claim form. However, the submission of a claim form facilitates the distribution process by confirming the class member's current mailing address and, where applicable, verifying identity and employment information. The high rate of affirmative claim submissions therefore reflects both active class engagement with the settlement and a high degree of awareness of the settlement terms, both of which are indicia of the adequacy of the notice program.
The high claims rate further supports the fairness and adequacy of the settlement. It indicates that a substantial majority of class members are aware of the settlement, understand its terms, and have elected to participate rather than opt out or remain passive. This level of engagement is particularly notable given the size and composition of the class, which includes both current and former employees of AMA spread across multiple production facilities throughout the greater Los Angeles metropolitan area.
The individual allocation formula for the distribution of the NSF operates as follows: sixty percent (60%) of each class member's individual allocation is based on the number of weeks worked during the class period (November 1, 2018 through October 31, 2023), and forty percent (40%) is based on the class member's recorded overtime hours during the same period. Meridian has calculated individual allocations for each participating class member based on payroll and timekeeping data extracted from NovaPay Solutions' TimeTrack Pro system, as provided by AMA pursuant to the terms of the Settlement Agreement and the Preliminary Approval Order. These individual allocation calculations will be summarized in Angela Truong's declaration supporting the Final Approval Motion, and a complete allocation schedule will be available for the Court's review upon request.
Based on preliminary calculations, the estimated average individual payment from the NSF is approximately $4,460 per class member ($8,251,525 ÷ 1,850), with individual amounts ranging from approximately $1,100 (for class members who worked a limited number of weeks during the class period and had few overtime hours) to approximately $12,800 (for long-tenured employees with significant overtime hours throughout the class period). These figures may adjust slightly as Meridian finalizes the allocation schedule and accounts for any remaining address issues or returned distribution checks.
V. Objection Analysis
A. Overview.  A total of four (4) objections were received by the January 2, 2024 deadline. This represents an objection rate of 0.22% (4 ÷ 1,850), which is well below the typical range for wage-and-hour class settlements. Each objection is analyzed individually below.
In summary, none of the four objections presents a substantive concern that warrants modification of the settlement terms or denial of final approval. Three of the objections raise standard and well-worn issues — attorneys' fees, allocation methodology, and settlement adequacy — that are routinely addressed and overruled in class settlement proceedings. The fourth objection, concerning the scope of the release of non-certified claims, is more substantive and warrants a careful response, but is ultimately consistent with established California law and standard settlement practice.
B. Objection 1: Carlos Vega — Attorneys' Fees
Objector: Carlos Vega, former production assistant, assigned to Facility 3, located at 15301 Ventura Boulevard, Suite 300, Sherman Oaks, CA 91403.
Date of Objection: December 29, 2023 (filed with the Court and served on counsel).
Substance of Objection: Mr. Vega objects to the attorneys' fee percentage of 33.33% of the Gross Settlement Amount ($14,750,000 × 33.33% = $4,916,175), which he characterizes as "excessive" and "disproportionate to the work performed." Mr. Vega argues that attorneys' fees should be limited to 25% of the GSA, which he contends is a more appropriate benchmark. Mr. Vega states that he is "a hardworking employee who deserves more of the settlement money" and that "the lawyers are taking too much off the top." Mr. Vega's objection is pro se and approximately one page in length.
Assessment:
The 33.33% fee request is well within the range routinely approved by California courts for common fund class action settlements. The California Supreme Court in Laffitte v. Robert Half International Inc. (2016) 1 Cal.5th 480, 503-506, endorsed the percentage-of-fund method as the appropriate approach for calculating attorneys' fees in common fund cases and expressly recognized that one-third of the recovery is a "common benchmark" in such cases. Courts in the Central District of California and in the Los Angeles Superior Court have regularly approved fees of 33.33% in wage-and-hour class settlements of comparable size and complexity. See, e.g., Bellinghausen v. Tractor Supply Co. (C.D. Cal. 2015) 306 F.R.D. 245, 261 (approving 33.33% fee award in wage-and-hour class action); Vasquez v. Coast Valley Roofing, Inc. (2015) 266 Cal.App.4th 1167 (approving one-third fee in employment class action).
Moreover, the fee request is amply justified by the quality and quantity of work performed by class counsel. Castellano Byrne & Salas LLP and Veltrano Employment Law Group PC, serving as co-lead class counsel, conducted extensive and contested litigation over approximately sixteen (16) months, including the following:
•  Review and analysis of 147,832 documents produced by AMA in discovery, comprising approximately 1.2 million pages of payroll records, timekeeping data, meal period policies, employee handbooks, internal communications, and corporate policy memoranda;
•  Production and review of 3,412 documents produced by Plaintiffs;
•  Eighteen (18) depositions, including depositions of the three named plaintiffs, five AMA corporate designees pursuant to Code of Civil Procedure section 2025.230, four AMA facility managers, three AMA Human Resources representatives, two NovaPay Solutions representatives regarding the TimeTrack Pro auto-deduction functionality, and the parties' respective damages experts;
•  Full class certification briefing, including an opening motion, opposition, reply, and supplemental briefing on the auto-deduction issue, culminating in a contested hearing before Judge Escobedo on August 4, 2023, and the Court's certification order dated August 11, 2023;
•  Two full-day mediation sessions before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc. on September 8, 2023 and September 22, 2023, resulting in the settlement reached on September 22, 2023;
•  Retention and coordination with Plaintiffs' damages expert, Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, who prepared a detailed damages model and expert report quantifying aggregate class damages at $38.6 million across all causes of action; and
•  Extensive post-settlement work, including drafting the Settlement Agreement, preparing the Preliminary Approval Motion and supporting papers, drafting the Class Notice, coordinating with Meridian Settlement Services on the notice program, and responding to class member inquiries.
Class counsel's litigation costs of $412,300 are separately itemized in the fee petition and are subject to independent Court approval. These costs include expert fees, deposition costs, document management platform fees (Relativity), mediation fees, filing fees, service of process costs, and travel expenses.
The result achieved — a Gross Settlement Amount of $14,750,000, representing approximately 38.2% of the $38.6 million in claimed aggregate exposure — is a strong outcome for the class, particularly in light of the Court's partial certification order that limited the certified class to the first meal period auto-deduction claim and derivative wage statement and Unfair Competition Law claims. The partial certification ruling denied certification on five of seven causes of action, which significantly reduced Plaintiffs' litigation leverage and trial exposure. Against that backdrop, the $14,750,000 settlement represents a favorable recovery that reflects both the strength of the certified claim and a reasonable discount for the substantial litigation risks associated with the non-certified claims.
Mr. Vega's objection is standard in nature and is regularly overruled by courts in the context of class settlement proceedings. It does not identify any specific deficiency in class counsel's work or any particular basis for concluding that the fee is unreasonable beyond a generalized preference for a lower percentage. This objection should be overruled.
C. Objection 2: Rachel Kimura — Allocation Formula
Objector: Rachel Kimura, current production coordinator, assigned to Facility 1, AMA's West Hollywood headquarters located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, CA 90069.
Date of Objection: January 2, 2024 (filed with the Court and served on counsel on the last day of the objection period).
Substance of Objection: Ms. Kimura objects to the settlement allocation formula, specifically the 60/40 weighting between weeks worked during the class period and recorded overtime hours. Ms. Kimura argues that overtime hours should be weighted more heavily — she suggests at least 70% — because, in her view, employees who worked more overtime hours necessarily worked longer shifts and were therefore more likely to miss or have their meal periods interrupted or auto-deducted. Ms. Kimura states that she "regularly worked 12- to 14-hour shifts during sweeps periods" and believes that employees like her are being "shortchanged" by the current formula. Ms. Kimura's objection is pro se and approximately two pages in length, with detailed references to her own work schedule.
Assessment:
Ms. Kimura's argument has some logical appeal. It is intuitive that employees who worked longer shifts, as reflected in higher overtime hours, may have experienced a greater frequency of meal period violations, particularly in the context of AMA's auto-deduction policy under the NovaPay Solutions TimeTrack Pro system, which automatically deducted a 30-minute meal period from employees' recorded hours regardless of whether the meal period was actually taken. Employees working longer shifts may have been more likely to work through meal periods due to production demands, and the auto-deduction would have affected a greater number of their worked hours in absolute terms.
However, the 60/40 allocation formula was negotiated at arm's length between class counsel and defense counsel during the two mediation sessions facilitated by the Honorable Patricia Okoro (Ret.). The formula represents a carefully crafted compromise that balances competing considerations. The sixty percent (60%) weeks-worked component ensures that all class members receive meaningful compensation for each week of exposure during the five-year class period, recognizing that every class member who worked at least one shift per week was subject to the auto-deduction policy and is therefore entitled to a baseline allocation reflecting that exposure. The forty percent (40%) overtime component provides additional, differential compensation to employees who worked longer shifts, thereby acknowledging — consistent with Ms. Kimura's argument — that employees with more overtime hours likely experienced a greater impact from the auto-deduction policy.
The allocation formula does not need to be perfect — it must be fair, reasonable, and adequate under the circumstances. California courts afford substantial deference to allocation formulas negotiated at arm's length by experienced counsel. As the Court of Appeal explained in Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 129, the role of the court in reviewing a class settlement is not to determine whether the settlement is the best possible outcome, but rather whether it falls within the range of reasonableness given the litigation risks and factual complexities of the case. This principle applies with equal force to the internal allocation methodology.
Moreover, there is no single "correct" weighting that can be derived from the available data. While overtime hours correlate with longer shifts, they do not perfectly track the incidence of meal period violations. Other factors — such as an employee's particular shift schedule, supervisor, department, and production cycle — also influenced the likelihood of a missed or interrupted meal period. The 60/40 formula is a reasonable approximation that captures the key variables without requiring individualized determinations that would be impractical and prohibitively costly to administer for a class of approximately 1,850 members.
This objection should be overruled. The allocation formula is fair, reasonable, and the product of informed, arm's-length negotiation.
D. Objection 3: Samuel Torres — Settlement Amount Too Low
Objector: Samuel Torres, former segment coordinator, assigned to Facility 4, located at 3800 W. Alameda Ave., Burbank, CA 91505.
Date of Objection: December 22, 2023 (filed with the Court and served on counsel).
Substance of Objection: Mr. Torres objects that the Gross Settlement Amount of $14,750,000 is "too low" and "doesn't come close to compensating what the company stole from us." Mr. Torres argues that the class should have received "at least $25 million" based on what he describes as "the true value of the claims." Mr. Torres references conversations with unnamed "colleagues" who share his view and states that "everyone knows the company made billions while shorting us on our breaks." Mr. Torres's objection is pro se and approximately one and one-half pages in length.
Assessment:
This is a standard "settlement is too low" objection that is routinely raised and routinely overruled in class settlement proceedings. While Mr. Torres's frustration is understandable, his objection does not identify any specific deficiency in the settlement negotiations, any error in the damages analysis, or any particular basis for concluding that a higher settlement amount could have been achieved through continued litigation.
The $14,750,000 Gross Settlement Amount represents 38.2% of Plaintiffs' expert Dr. Howard Rennick's aggregate damages calculation of $38.6 million. Dr. Rennick's calculation assumed liability on all seven causes of action asserted in the operative complaint. It also represents approximately 254% of the defense expert Dr. Catherine Lindstrom's (Hargrove Analytics Inc.) alternative damages calculation of $5.8 million, which assumed a substantially lower violation rate and applied a more conservative methodology for calculating premium pay.
The settlement was reached after extensive discovery, competing expert analyses, full class certification briefing, a contested certification hearing, and adversarial mediation before a highly experienced neutral. The settlement was not the product of pre-discovery or pre-certification negotiations; rather, it was reached only after the parties had fully developed the factual record and received a definitive ruling from the Court on class certification.
Critically, the Court's August 11, 2023 certification order significantly shaped the settlement landscape. Judge Escobedo granted certification on only two of the seven causes of action — the first meal period auto-deduction claim (First Cause of Action) and the derivative inaccurate wage statement claim (Sixth Cause of Action), as well as the UCL derivative claim (Seventh Cause of Action) — while denying certification on the remaining five causes of action:
1.  Rest period violations (Second Cause of Action) — denied for lack of common proof of a uniform policy;
2.  Off-the-clock/overtime violations (Third Cause of Action) — denied for predominance of individualized issues;
3.  Minimum wage violations (Fourth Cause of Action) — denied as derivative of the overtime claim;
4.  Second meal period violations (Fifth Cause of Action) — denied because the auto-deduction issue applied only to the first meal period; and
5.  Waiting time penalties under Labor Code section 203 (derivative claim) — denied as dependent on the non-certified substantive claims.
This partial certification substantially discounted the value of the case relative to the full $38.6 million aggregate exposure. Had Plaintiffs proceeded to trial on only the certified claims, the maximum recoverable damages would have been significantly less than the $38.6 million figure — Dr. Rennick estimated the damages attributable solely to the certified first meal period claim and derivative claims at approximately $12.4 million. Against that figure, the $14,750,000 GSA represents a recovery of approximately 119% of the certified claim value — a result that reflects both the strength of the certified claim and an implicit premium attributable to the value of the non-certified claims being released.
The Net Settlement Fund of $8,251,525 yields an estimated average payment of approximately $4,460 per class member ($8,251,525 ÷ 1,850). Individual payments will vary based on weeks worked and overtime hours, with estimated payments ranging from approximately $1,100 to $12,800.
The settlement falls well within the range of reasonableness and was the product of informed, vigorous, arm's-length negotiation between experienced counsel. Mr. Torres has not identified any basis for concluding that a materially better result could have been achieved through continued litigation, particularly in light of the partial certification order. This objection should be overruled.
E. Objection 4: Dawn Prescott — Broad Release of Non-Certified Claims
Objector: Dawn Prescott (no relation to AMA Vice President of Human Resources Dwayne Prescott), former post-production assistant, assigned to Facility 7, located at 888 N. Sepulveda Blvd., El Segundo, CA 90245.
Date of Objection: December 28, 2023 (filed with the Court and served on counsel).
Substance of Objection: Ms. Prescott objects to the scope of the settlement release, which encompasses all wage-and-hour claims arising from the operative facts during the class period, including both the certified claims (first meal period auto-deduction, derivative wage statement violations, and UCL claims) and the non-certified claims (rest period violations, off-the-clock/overtime violations, minimum wage violations, second meal period violations, and waiting time penalties). Ms. Prescott argues that the class is "giving up valuable claims that the Court already said can't be certified as a class" and is "receiving no separate compensation for releasing those claims." Ms. Prescott further contends that "each of these claims has independent value" and that class members "should not be forced to release claims they never had the chance to litigate as a class." Ms. Prescott's objection is approximately three pages in length, is well-written, and cites several cases (though not always accurately). Ms. Prescott appears to be pro se but may have received legal guidance, as the objection is more polished and legally sophisticated than the other three objections.
Assessment:
This is the most substantive of the four objections and warrants a detailed and carefully articulated response, both in our written Response to Objections and at the Final Approval Hearing.
Ms. Prescott raises a legitimate concern about the breadth of the settlement release relative to the scope of class certification. It is true that the Court denied certification on five of seven causes of action, and it is true that the settlement release encompasses all seven causes of action (plus PAGA claims). However, this structure is both legally permissible and standard practice in California wage-and-hour class settlements, and the settlement consideration adequately reflects the value of the released claims.
Legal Framework. The California Court of Appeal has expressly approved broad releases in class settlements that extend beyond the certified claims, provided that the release is reasonably related to the claims at issue and the settlement consideration reflects the value of the released claims. In Villacres v. Northpoint Services Inc. (2010) 189 Cal.App.4th 562, 584, the Court of Appeal held that a settlement release encompassing claims beyond those specifically certified for class treatment is permissible where the released claims arise from the same factual predicate as the certified claims and the settlement consideration accounts for the released claims' value. The court recognized that "[a] class action settlement need not obtain an adjudication of every individual claim in order to provide a valid release of related claims, so long as the class members receive fair and adequate compensation."
Similarly, in Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801, the Court of Appeal recognized that the scope of a release in a class settlement is a factor to be considered in evaluating the overall fairness of the settlement, but does not independently render a settlement unfair where the release is accompanied by adequate consideration.
Settlement Consideration Reflects Released Claims. The GSA of $14,750,000 was negotiated with the non-certified claims squarely in mind. During the two mediation sessions before Judge Okoro, both sides acknowledged that the non-certified claims had value, notwithstanding the denial of class certification. Individual class members retain the right to pursue the non-certified claims on an individual basis, and the PAGA representative claim (which does not require class certification under the Private Attorneys General Act, Labor Code section 2698 et seq.) covers the same underlying violations as the non-certified class claims. Both of these factors gave Plaintiffs' counsel leverage during the settlement negotiations to demand — and obtain — a settlement amount that exceeds the value of the certified claims standing alone.
As discussed in the analysis of Mr. Torres's objection above, Dr. Rennick estimated the damages attributable solely to the certified first meal period claim and derivative claims at approximately $12.4 million. The $14,750,000 GSA exceeds that figure by $2,350,000 — a premium of approximately 19% — which reflects the additional value attributable to the non-certified claims being released. While no precise mathematical formula can disaggregate the consideration attributable to each released claim, the overall settlement amount plainly reflects the parties' recognition that the broad release has value and that the settlement consideration must account for it.
PAGA Component. Moreover, the PAGA component of the settlement provides an additional layer of compensation attributable to the broader range of violations, including those not certified for class treatment. The Settlement Agreement allocates $750,000 to the PAGA claim, of which seventy-five percent ($562,500) is paid to the California Labor and Workforce Development Agency ("LWDA") and twenty-five percent ($187,500) is distributed to aggrieved employees. The PAGA claim is not limited to the auto-deduction issue; it encompasses all alleged Labor Code violations, including rest period, overtime, minimum wage, and waiting time violations. The PAGA allocation therefore provides some compensation specifically attributable to the non-certified claims.
Practical Considerations. From a practical standpoint, the broad release was a bargained-for element of the settlement that was essential to AMA's willingness to agree to the $14,750,000 GSA. If the settlement did not include a release of the non-certified claims, AMA would face ongoing litigation risk from individual claims and potential future PAGA actions based on the same underlying wage-and-hour violations. AMA's counsel made clear during mediation that a settlement without a comprehensive release was not acceptable to AMA's management or its board of directors. Had Plaintiffs insisted on a narrower release limited to the certified claims, AMA would likely have offered a substantially lower settlement amount — potentially in the range of $8 million to $10 million, based on the mediation discussions — which would have resulted in materially lower individual payments to class members.
Recommendation. This objection should be overruled, but we should address it with particular care in our Response to Objections and in the Final Approval Motion. The Prescott objection raises a concern that Judge Escobedo may find worth discussing at the Final Approval Hearing, and we should be prepared to present a thorough oral argument explaining why the broad release is appropriate and adequately compensated. Our response should cite Villacres, Dunk, and other relevant authority, and should include a clear explanation of how the settlement amount reflects the value of the non-certified claims. We should also consider whether to include an additional paragraph in the Supplemental Vasquez Declaration specifically addressing the negotiation of the release scope and the consideration attributable to the non-certified claims.
VI. Comparative Analysis — Opt-Outs and Objections in Context
To place the opt-out and objection data in proper context, the following table compares the key metrics from this settlement to the typical ranges observed in California wage-and-hour class settlements, based on published case data and the experience of this firm:
Several observations merit emphasis. First, the opt-out rate of 1.24% is at the low end of the typical range, indicating that the overwhelming majority of class members have elected to remain in the class and receive the benefits of the settlement rather than preserve their right to pursue individual claims. Second, the objection rate of 0.22% is substantially below the typical range, suggesting that the class has very few substantive concerns about the settlement terms. Third, the claims rate of 68.2% is exceptionally high, even accounting for the pro rata distribution structure, and reflects a level of class engagement and awareness that courts regularly cite as evidence of the adequacy of the notice program and the fairness of the settlement.
Taken together, these metrics paint a clear picture: the class views the settlement as fair and acceptable. The low opt-out rate, minimal objection activity, and high claims rate are all strong indicators that the settlement has broad class support and is likely to receive final approval.
Courts in California have recognized that precisely these metrics are probative of a settlement's fairness. See, e.g., Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at 1801 (noting that the number and nature of objections is one factor in evaluating settlement fairness); Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at 133 (high participation rate and low opt-out rate support approval); Cellphone Termination Fee Cases (2010) 186 Cal.App.4th 1380, 1394 (small number of objectors relative to class size favors approval).
VII. Recommendations
Based on the foregoing analysis, we make the following recommendations:
1. Proceed with Final Approval Motion. The opt-out and objection data strongly supports final approval. The opt-out rate is well below the contractual blow provision threshold, the objections are manageable, and the claims rate is exceptionally high. We recommend filing the Motion for Final Approval on January 22, 2024, as previously planned and consistent with the Court's Preliminary Approval Order briefing schedule.
2. Response to Objections. We should prepare and file a Response to Class Member Objections as a separate document on January 22, 2024, concurrently with the Final Approval Motion. The response should address each of the four objections individually. The Vega objection (attorneys' fees), Kimura objection (allocation formula), and Torres objection (settlement amount) can be addressed relatively briefly — approximately one to two pages each — as they raise standard issues for which there is ample supporting authority. The Prescott objection (broad release of non-certified claims) warrants a more detailed response of approximately three to four pages, given its greater substantive complexity and the likelihood that Judge Escobedo will inquire about this issue at the hearing.
3. Supporting Declarations. The Final Approval Motion should be supported by the following declarations:
(a) Declaration of Angela Truong (Meridian Settlement Services LLC) regarding the notice administration process, including details of the mailing, re-mailing of returned notices, settlement website traffic, toll-free line activity, opt-out and objection data, claims data, and the individual allocation calculations;
(b) Declaration of Devon Archer (AMA's designated representative for settlement implementation) regarding AMA's compliance with the settlement terms, including the provision of class member data, cooperation with Meridian on the notice program, and confirmation that AMA does not intend to exercise its termination right under Section 12.3 of the Settlement Agreement; and
(c) Supplemental Declaration of Renata Vasquez in Support of Final Approval, updating the September 22, 2023 declaration filed in support of the Preliminary Approval Motion with current data regarding opt-outs, objections, claims, and the overall status of the settlement. This supplemental declaration should include a specific discussion of the negotiation of the release scope and the consideration attributable to the non-certified claims, in order to provide a factual foundation for our response to the Prescott objection.
4. Final Approval Hearing. The Final Approval Hearing is currently scheduled for February 2, 2024, at 9:00 a.m. before the Honorable Raymond Escobedo in Department 34 of the Stanley Mosk Courthouse. We should prepare a detailed oral argument outline that addresses each of the four objections, emphasizes the strong class response data, and highlights the key factors supporting final approval under the Kullar and Dunk frameworks. We should be particularly prepared to address questions from Judge Escobedo regarding the Prescott objection and the scope of the release. I recommend scheduling an internal moot session on or about January 29, 2024, to prepare Renata and co-lead counsel for the hearing.
5. No Modification to Settlement Terms Required. Based on our review, none of the four objections warrants modification of any settlement term. The fee percentage of 33.33%, the 60/40 allocation formula, the Gross Settlement Amount of $14,750,000, and the scope of the release are all fair, reasonable, and consistent with California law and the realities of the litigation. We do not recommend any amendments to the Settlement Agreement.
6. Notify AMA. Greg Tanaka of Whitfield Baines & Tanaka LLP and Philippa Cartwright, AMA's General Counsel, should be formally advised of the final opt-out and objection results and our assessment that final approval is on track. Mr. Tanaka has already been informally apprised of the results via our January 5 email exchange, but a formal letter or email summarizing the data and our assessment would be appropriate. We should also confirm with Mr. Tanaka that AMA's designated representative, Devon Archer, is available to execute the supporting declaration and to appear at the Final Approval Hearing if requested by the Court.
VIII. Appendix / Attachments Reference
The following appendices are referenced in this memorandum and are attached hereto or will be provided under separate cover as indicated:
Appendix A: Summary of 23 Opt-Outs — includes names, assigned facilities, show units, job titles, and dates of opt-out letters. (To be provided by Meridian Settlement Services LLC upon finalization of the opt-out verification process; expected delivery: January 10, 2024.)
Appendix B: Full text of each of the 4 objections received, including the objections filed by Carlos Vega (December 29, 2023), Samuel Torres (December 22, 2023), Dawn Prescott (December 28, 2023), and Rachel Kimura (January 2, 2024). (Copies attached hereto.)
Appendix C: Meridian Settlement Services LLC interim report on notice administration and claims processing, dated January 5, 2024, prepared by Angela Truong. (Copy attached hereto.)
This memorandum is a confidential attorney work product prepared by Calderwood & Harkness LLP in anticipation of litigation and for the purpose of providing legal advice to counsel of record in Fuentes v. Aurelius Media Americas Inc., LASC Case No. 22STCV38214. This memorandum is protected by the attorney work product doctrine and the attorney-client privilege. Any disclosure, copying, or distribution of this memorandum or its contents without the express written consent of Calderwood & Harkness LLP is strictly prohibited.
Category | Count | Detail
Class Notices Mailed | 1,843 | 7 returned as undeliverable; re-mailed to updated addresses via skip-tracing
Valid Opt-Outs Received | 23 | 1.24% of estimated class of approximately 1,850
Objections Filed | 4 | Detailed analysis provided in Section V below
Valid Claims Submitted | 1,262 | 68.2% claims rate (1,262 of 1,850 estimated class members)
Metric | This Settlement | Typical Range (CA Wage-and-Hour)
Opt-out rate | 1.24% (23 of 1,850) | 1–5%
Objection rate | 0.22% (4 of 1,850) | 0.5–3%
Claims rate | 68.2% (1,262 of 1,850) | 20–40% (claims-made); higher for pro rata distributions

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