CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-9400 Facsimile: (213) 555-9401
Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
I, Renata Vasquez, declare as follows:
1. I am a partner at the law firm of Calderwood & Harkness LLP, located at 777 South Flower Street, Suite 4200, Los Angeles, California 90017. I am a member in good standing of the State Bar of California, Bar Number SBN 224578. I am counsel of record for Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant") in the above-captioned consolidated action. I have been admitted to practice before all courts of the State of California and the United States District Courts for the Central, Northern, Eastern, and Southern Districts of California. I make this declaration based upon my own personal knowledge and, if called as a witness, I could and would competently testify to the matters set forth herein. This Supplemental Declaration is submitted to update the Court and supplements the Declaration of Renata Vasquez that was previously filed on September 22, 2023, in support of AMA's joinder in the Motion for Preliminary Approval of Class Action Settlement ("September 22, 2023 Declaration").
2. This Supplemental Declaration is filed in connection with AMA's joinder in the Motion for Final Approval of Class Action Settlement, which was filed by Class Counsel on January 22, 2024. The purpose of this Supplemental Declaration is to update the Court on developments that have occurred since the filing of my September 22, 2023 Declaration and since the Court's entry of the Preliminary Approval Order on October 18, 2023. Specifically, this declaration provides updated information regarding: (a) the administration of class notice; (b) the claims rate among class members; (c) the number and nature of opt-outs received; (d) the number and nature of objections received; (e) the continued reasonableness of the settlement in light of all available information; and (f) any intervening developments material to the Court's final approval analysis under California Rules of Court, rule 3.769, and the governing standards for final approval of class action settlements.
3. As detailed in my September 22, 2023 Declaration and the Class Action Settlement Agreement and Release executed by the parties on September 15, 2023 (the "Settlement Agreement"), a true and correct copy of which was attached as Exhibit 1 to the Declaration of Philip K. Nakamura filed September 22, 2023, the material terms of the settlement are as follows. The Gross Settlement Amount ("GSA") is Fourteen Million Seven Hundred Fifty Thousand Dollars ($14,750,000.00), and the GSA is non-reversionary, meaning that the entire amount will be distributed and no portion will revert to AMA under any circumstances. From the GSA, the following allocations are made: (a) Attorneys' Fees in the amount of $4,916,175.00, representing one-third (33.33%) of the GSA, subject to Court approval; (b) Litigation Costs Reimbursement in the amount of $412,300.00; (c) Service Awards to the Named Plaintiffs in the total combined amount of $35,000.00, allocated as follows: $15,000.00 to Marisol Fuentes, $10,000.00 to Derek Halloran, and $10,000.00 to Yesenia Padilla; (d) Settlement Administration Costs payable to Meridian Settlement Services LLC ("Meridian") in the amount of $385,000.00; and (e) PAGA Payment in the amount of $750,000.00, of which seventy-five percent (75%), or $562,500.00, shall be paid to the California Labor and Workforce Development Agency ("LWDA"), and twenty-five percent (25%), or $187,500.00, shall be distributed to aggrieved employees on a pro rata basis. After deduction of all of the foregoing allocations from the GSA, the Net Settlement Fund available for distribution to participating class members is $8,251,525.00. The Distribution Formula provides for allocation of the Net Settlement Fund on a weighted basis, with sixty percent (60%) of each class member's individual share determined by the number of weeks worked during the class period and forty percent (40%) determined by the number of recorded overtime hours during the class period. The Class Period, as modified in the Settlement Agreement, runs from November 1, 2018 through October 31, 2023. The estimated Class Size is approximately 1,850 individuals. All of these material terms remain unchanged since the Court entered its Preliminary Approval Order on October 18, 2023, and no amendment, modification, or supplement to the Settlement Agreement has been executed or proposed by either party.
4. On October 18, 2023, the Court entered its Order Granting Preliminary Approval of Class Action Settlement (the "Preliminary Approval Order"). In the Preliminary Approval Order, the Court provisionally certified the settlement class as defined in the Settlement Agreement, approved the form and content of the proposed class notice, and appointed Meridian Settlement Services LLC ("Meridian"), with Angela Truong as the principal contact (1600 E. Fourth Street, Suite 240, Santa Ana, California 92701), as the claims administrator responsible for administering the notice program and processing claims submitted by class members. In accordance with the Preliminary Approval Order, Meridian mailed the Class Notice by first-class United States mail on November 3, 2023, to the last known address of each identified class member, using the address information provided by AMA from its human resources and payroll records. Concurrently with the mailing of the Class Notice, Meridian activated the settlement website, which provided class members with access to the Settlement Agreement, the Class Notice, a Claim Form, frequently asked questions, and contact information for both Class Counsel and AMA's counsel. As set forth in the Preliminary Approval Order, the deadline for class members to submit requests for exclusion (opt-outs) or objections to the settlement was January 2, 2024.
5. A detailed accounting of the notice administration process and its results is set forth in the Declaration of Angela Truong, filed by Meridian Settlement Services LLC on January 22, 2024, in support of the Motion for Final Approval. I incorporate and cross-reference the Truong Declaration here and briefly summarize its key findings for the Court's convenience. According to the Truong Declaration, the total number of class notices mailed was 1,843, reflecting the actual number of unique, identifiable class members for whom AMA was able to provide address information. Of the 1,843 notices mailed, seven (7) were initially returned by the United States Postal Service as undeliverable. Meridian performed skip-tracing procedures on all seven returned notices and subsequently re-mailed each notice to an updated address. No notice remained undeliverable after the re-mailing. The settlement website received a total of 2,847 unique visits during the notice period, and Meridian's toll-free information line received 312 telephone calls from class members seeking additional information about the settlement. Based on my review of the Truong Declaration and the underlying notice administration records, and based on my experience with class action settlement notice programs, I am satisfied that the notice administration was conducted in full compliance with the Preliminary Approval Order and that it satisfied the requirements of due process under both the California and United States Constitutions, as well as the standards set forth in California Rules of Court, rule 3.769(f).
6. According to the data compiled by Meridian and set forth in the Truong Declaration, the total number of valid claims submitted by class members is 1,262 out of the approximately 1,850 individuals in the settlement class, resulting in a claims rate of approximately 68.2%. This claims rate is well above the average for California wage-and-hour class action settlements, where courts have recognized that typical claims rates generally range from approximately 10% to 40%. See, e.g., Wershba v. Computer, Inc. (2001) 91 Cal.App.4th 224, 241 (noting that claims rates in class action settlements are often modest); Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 133 (evaluating claims rate as a factor in final approval analysis). The exceptionally high claims rate achieved here reflects both the effectiveness of the notice program designed and implemented by Meridian and the broad support among class members for the terms of the settlement. On a pro rata basis, if the Net Settlement Fund of $8,251,525.00 were divided equally among all 1,850 class members, each class member would receive approximately $4,460.00. However, actual individual payments will vary and will be distributed according to the 60/40 allocation formula set forth in the Settlement Agreement, based on each participating class member's number of weeks worked during the class period and recorded overtime hours. Class members who worked more weeks and logged more overtime hours during the class period will receive proportionally larger individual payments.
7. The total number of valid requests for exclusion (opt-outs) received by Meridian by the January 2, 2024 deadline was twenty-three (23). This represents an opt-out rate of approximately 1.24% (23 out of 1,850 class members). This opt-out rate is far below the five percent (5%) threshold — which would correspond to approximately 93 individuals — that would trigger AMA's contractual right to void the settlement pursuant to Section 11.3 of the Settlement Agreement. AMA does not intend to exercise, and hereby waives, any right to void the settlement on the basis of the number of opt-outs. In reviewing the opt-out requests, I have not discerned any pattern among the individuals who elected to exclude themselves from the settlement. The 23 opt-outs come from multiple AMA production facilities and show units across the Los Angeles area, and no single attorney appears to represent, organize, or solicit any of the opt-out requests. The minimal opt-out rate further supports the conclusion that the overwhelming majority of the class supports the settlement and wishes to participate in the distribution of the Net Settlement Fund.
8. The total number of objections to the settlement received by Meridian by the January 2, 2024 deadline was four (4). Each of these objections is addressed in detail in the Response to Class Member Objections filed by Class Counsel on January 22, 2024, which AMA joins. For the Court's convenience, I briefly summarize each objection below:
(a) Carlos Vega (former production assistant, Facility 3 — Sherman Oaks): Mr. Vega objects to the attorneys' fee percentage of 33.33% of the GSA as excessive. He argues that attorneys' fees should be limited to 25% of the GSA. As addressed in the Response to Class Member Objections, a one-third fee is well within the range routinely approved by California courts in common fund class action settlements and is consistent with the risk-reward calculus appropriate for complex wage-and-hour litigation of this scope and duration. See, e.g., Laffitte v. Robert Half Int'l Inc. (2016) 1 Cal.5th 480, 503–06 (affirming one-third fee award in wage-and-hour class action).
(b) Rachel Kimura (current production coordinator, Facility 1 — West Hollywood headquarters): Ms. Kimura objects to the 60/40 allocation formula used to distribute the Net Settlement Fund. She argues that recorded overtime hours should be weighted more heavily than weeks worked, contending that class members who worked substantial overtime were more significantly harmed. As discussed in the Response to Class Member Objections, the 60/40 allocation formula was the product of arm's-length negotiation between the parties and reflects a reasonable balance between compensating class members for the meal period violations — which applied to all non-exempt employees regardless of overtime — and providing additional compensation to those who worked overtime hours during the class period.
(c) Samuel Torres (former segment coordinator, Facility 4 — Burbank): Mr. Torres objects to the total settlement amount of $14,750,000.00 as too low. He argues that the class should have received at least $25,000,000.00. As set forth in the Response to Class Member Objections and as discussed further in Paragraph 9 below, the GSA of $14,750,000.00 represents approximately 38.2% of Plaintiffs' expert's maximum damages calculation and falls at the upper end of the range typically approved by California courts in wage-and-hour class action settlements, particularly when accounting for the significant litigation risks that both sides would face if the case proceeded to trial.
(d) Dawn Prescott (former post-production assistant, Facility 7 — El Segundo): Ms. Prescott objects to the release of non-certified claims — specifically, rest period claims and off-the-clock claims — without separate or additional compensation. Ms. Prescott is not related to AMA Vice President Dwayne Prescott; Meridian confirmed the absence of any familial connection. As discussed in the Response to Class Member Objections, the release of the non-certified claims is appropriate because those claims arise from the same set of operative facts as the certified claims, were encompassed within the parties' pre-settlement discovery and damages analysis, and were accounted for in the overall valuation of the GSA.
None of the four objections presents a material obstacle to final approval of the settlement. All four objections have been addressed in detail in the Response to Class Member Objections, and AMA joins in the arguments and authorities set forth therein. As of the date of this Supplemental Declaration, no objector has indicated an intent to appeal the Final Approval Order if it is granted by the Court, nor has any objector communicated to my office any intention to file post-judgment motions or seek appellate review.
9. In my professional judgment, based on nearly two decades of experience representing employers in complex employment class action litigation in California state and federal courts, the settlement remains fair, adequate, and reasonable in light of the litigation risks faced by both parties, and the analysis set forth in my September 22, 2023 Declaration remains fully applicable. The settlement was the product of arm's-length negotiations conducted over two full-day mediation sessions held on August 25, 2023 and September 8, 2023, before the Honorable Patricia Okoro (Ret.) of Westpark Dispute Resolution Inc., located at 1925 Century Park East, Suite 1700, Los Angeles, California 90067. Judge Okoro is a retired Los Angeles Superior Court Judge who served on the bench for over twenty-five years and has extensive experience mediating complex employment class actions, wage-and-hour disputes, and PAGA representative actions. Judge Okoro's active involvement in the mediation process ensured that the negotiations were conducted at arm's length and that the resulting settlement terms reflect a fair compromise of the parties' respective positions.
Prior to the mediation, the parties conducted extensive pre-settlement discovery over a period of approximately ten months. AMA produced a total of 147,832 documents, comprising approximately 1.2 million pages. These productions included payroll records, timekeeping data, TimeTrack Pro system configurations, internal policy documents, management communications, corporate policies and procedures, employee handbooks, and facility-specific operations manuals for all seven of AMA's California production facilities. Plaintiffs produced 3,412 documents, including personal employment records, communications, and declarations. A total of eighteen (18) depositions were taken during the pre-settlement discovery period — eleven (11) by Plaintiffs and seven (7) by AMA's defense team. Additionally, competing expert reports were exchanged. Plaintiffs retained Dr. Howard Rennick of Pinnacle Economic Consulting Group LLC, who calculated total aggregate class-wide damages of approximately $38.6 million, inclusive of $12.2 million in estimated PAGA penalties. AMA retained two experts: Dr. Rajesh Makhija of Workforce Dynamics Consulting LLC, who opined on damages methodology and individualized defense issues, and Dr. Catherine Lindstrom of Hargrove Analytics Inc., who provided statistical analysis of meal period compliance data and challenged several of Plaintiffs' aggregate damages assumptions.
The GSA of $14,750,000.00 represents approximately 38.2% of Plaintiffs' expert's total damages calculation of $38.6 million. This recovery percentage falls at the upper end of the range typically approved by California courts in wage-and-hour class action settlements, where recovery percentages of fifteen percent (15%) to forty percent (40%) of claimed exposure are routinely upheld as fair and reasonable. See, e.g., Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 (articulating factors for evaluating settlement fairness); Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 130 (requiring trial court to evaluate settlement amount in relation to litigation risks and maximum recovery).
The settlement resolves not only the claims that were certified by the Court — 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 — but also releases all non-certified claims that were alleged or could have been alleged on the facts of this case, including rest period claims, off-the-clock and overtime claims, minimum wage claims, second meal period claims, and waiting time penalty claims under California Labor Code sections 201–203. The settlement also resolves Plaintiffs' PAGA representative claims, with the PAGA payment of $750,000.00 allocated seventy-five percent ($562,500.00) to the LWDA and twenty-five percent ($187,500.00) to aggrieved employees, in compliance with California Labor Code section 2699, subdivision (i). The comprehensive scope of the release provides AMA and the class with complete finality and avoids the risk of future piecemeal litigation arising from the same course of conduct.
Since my September 22, 2023 Declaration was filed, no intervening legal development — whether legislative, judicial, or regulatory — has altered the litigation risk assessment underlying the settlement or changed the parties' evaluation of the claims, defenses, or potential recovery in any material respect.
10. Since the filing of my September 22, 2023 Declaration and the entry of the Preliminary Approval Order on October 18, 2023, the following developments have occurred, each of which I bring to the Court's attention in the interest of full disclosure and transparency:
(a) AB 1076 / SB 699 (effective January 1, 2024): The California Legislature enacted AB 1076 and SB 699, now codified at California Business and Professions Code sections 16600.5 and 16600.7, which further strengthen California's longstanding prohibition against non-competition agreements and provide additional enforcement mechanisms for employees seeking to challenge such agreements. While these statutes relate primarily to the separate individual executive dispute between AMA and Gavin Aldrich (Case No. 22STCV41087, assigned to the Honorable Catherine Villanueva, Department 52), and do not directly implicate the wage-and-hour class action claims at issue in this consolidated action, they underscore the California Legislature's continuing commitment to robust employee-protection policies. The policy objectives reflected in AB 1076 and SB 699 are broadly consistent with the settlement's resolution of wage-and-hour claims in favor of the class and further support the conclusion that the settlement advances the public interest in vindicating employee rights.
(b) Aldrich Matter Resolved: The individual executive dispute between AMA and Gavin Aldrich (Case No. 22STCV41087) has been resolved. The parties executed a confidential settlement agreement on January 19, 2024, and a Stipulation for Dismissal with Prejudice was filed on January 26, 2024. A Request for Dismissal was subsequently filed on January 29, 2024. The resolution of the Aldrich matter eliminates any potential conflict or overlap between the class action and the executive dispute. It also removes any risk that the Aldrich litigation could generate adverse rulings or factual findings that might complicate the class settlement. The resolution of the Aldrich matter further supports the finality and comprehensiveness of the class settlement currently before the Court.
(c) No Additional Litigation Filed: Since the entry of the Preliminary Approval Order on October 18, 2023, no follow-on litigation, PAGA representative actions, individual wage-and-hour claims, or other employment-related claims have been filed by class members or other AMA employees arising from the facts and circumstances at issue in this consolidated action. The absence of any additional litigation reinforces the conclusion that the settlement is broadly supported by the class and that the claims being released are being resolved through this proceeding on terms acceptable to the affected individuals.
(d) AMA Compliance Measures: Although not required by the terms of the Settlement Agreement, AMA has voluntarily implemented a series of corrective measures that were identified during the course of the litigation and the pre-settlement discovery process. These measures include: (i) activation of the Missed Meal Attestation feature in AMA's TimeTrack Pro timekeeping system at all seven California production facilities, including Facilities 2, 4, and 7, which were corrected in December 2022 following the filing of this action; (ii) correction of the TimeTrack Pro auto-deduction threshold from six (6) hours to five (5) hours, consistent with the requirements of Industrial Welfare Commission Wage Order 12 and California Labor Code section 512, which requires that employers provide a first meal period to employees who work more than five hours in a workday; and (iii) distribution of updated meal and rest break policy materials to all non-exempt employees at each of AMA's California production facilities. These compliance measures demonstrate AMA's good faith commitment to ensuring that its timekeeping and meal break practices fully comply with California law on a going-forward basis.
11. AMA confirms that it is prepared to fund the settlement in full within fourteen (14) days of the Court's entry of the Final Approval Order, as required by Section 6.1 of the Settlement Agreement. Funding of the GSA will be provided from two sources. First, Pemberton Mutual Assurance Co., AMA's employment practices liability ("EPL") insurer under Policy No. PMA-EPL-2022-00837, has authorized a carrier contribution of $9,250,000.00 toward the GSA. This authorization was confirmed in a letter from Pemberton's coverage counsel dated September 13, 2023, a true and correct copy of which was attached as Exhibit 4 to my September 22, 2023 Declaration. The carrier contribution is conditioned solely on entry of a Final Approval Order by this Court, and Pemberton has confirmed that it remains ready to fund its portion upon satisfaction of that condition. Second, AMA will self-fund the remaining $5,500,000.00 of the GSA from its corporate operating funds. Taken together, the carrier contribution of $9,250,000.00 and AMA's self-funded contribution of $5,500,000.00 equal the full GSA of $14,750,000.00. Upon funding, the entire GSA will be wired to Meridian Settlement Services LLC's designated escrow account for distribution to participating class members, the LWDA, and other payees in accordance with the Settlement Agreement and the allocation formula approved by the Court.
12. As of the date of this Supplemental Declaration, January 30, 2024, no objector, class member, or any other party or interested person has communicated to me, to any other attorney at Calderwood & Harkness LLP, or, to my knowledge, to Class Counsel or Meridian Settlement Services LLC, any intent to appeal the Final Approval Order if it is granted. None of the four objectors identified in Paragraph 8 above has indicated that he or she intends to seek appellate review, file any post-judgment motions, or otherwise challenge the Final Approval Order through any procedural mechanism. The absence of any indication of a potential appeal supports the conclusion that the settlement, once finally approved, will achieve prompt finality and that the Net Settlement Fund can be distributed to class members without delay.
13. Based on the foregoing, including the strong claims rate of 68.2% (1,262 claims out of approximately 1,850 class members), the minimal opt-out rate of 1.24% (23 out of 1,850), the limited number and nature of objections (4 total, none presenting a material concern or obstacle to final approval), the continued fairness, adequacy, and reasonableness of the settlement terms in light of the litigation risks, the comprehensive scope of the release, the absence of any adverse intervening legal or factual developments, AMA's readiness to fund the full GSA of $14,750,000.00 within fourteen days of entry of the Final Approval Order, and the absence of any indication of an intent to appeal, I respectfully submit that the settlement merits final approval by this Court. I further respectfully request that the Court grant the Motion for Final Approval of Class Action Settlement and enter the proposed Final Approval Order and Judgment.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed this 30th day of January, 2024, in Los Angeles, California.
By: ________
Renata Vasquez Partner, Calderwood & Harkness LLP California State Bar No. 224578
MARISOL FUENTES, DEREK HALLORAN, and YESENIA PADILLA, individually and on behalf of all others similarly situated,
(Consolidated with 22STCV39501)
Plaintiffs,
Hon. Raymond Escobedo, Dept. 34
v.
SUPPLEMENTAL DECLARATION OF RENATA VASQUEZ IN SUPPORT OF MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,
Hearing Date: February 2, 2024
Defendants.
Dept.: 34