Google Must Face Advertisers' Move for Class Status

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By Perry Cooper

Sept. 21 — Google must face a revived motion for class certification brought by advertisers who allege the search engine lied about where their ads would appear.

Differences in potential individual restitution awards alone don't defeat class certification, Judge Richard A. Paez wrote Sept. 21 for the U.S. Court of Appeals for the Ninth Circuit.

Therefore, the lower court improperly denied certification based on its finding that determining which class members are entitled to restitution, and how much, would require individual inquiries that would predominate over class claims, the court said.

Parked Domains, Error Pages

From 2004 and 2008, AdWords was Google's auction-based program through which advertisers would bid for Google to place their ads on websites. Advertisers could request that their ads appear along with search results for certain search terms, or on full content sites with keywords that matched the ad.

But Pulaski & Middleman LLC and other advertisers brought a putative class action against Google Inc. for allegedly misleading advertisers by failing to disclose that AdWords ads also appeared on parked domain pages (undeveloped domains without content) and error pages that included ads.

They sought restitution of money Google wrongfully obtained under California's Unfair Competition and Fair Adverting Laws. They proposed three methods of calculating restitution, all based on the difference between what advertisers actually paid and what they would have paid if Google had told them all of the types of sites where their ads might appear.

The district court refused to certify a class, finding that individual questions predominated over common questions on the issues of entitlement to restitution and the amount due to each class member. The class appealed.

Entitlement Is Common Question

The Ninth Circuit first took issue with the district court's holding that individual questions predominated as to whether each class member is entitled to restitution.

To state a claim for false advertising or promotional practices under the UCL or FAL, “it is necessary only to show that members of the public are likely to be deceived,” the court said. “This inquiry does not require individualized proof of deception, reliance and injury.”

Thus, courts don't need to make individual determinations on entitlement to restitution—it's available on a classwide basis once the class representative has shown liability under the UCL or FAL, the court held.

Different Calculations No Bar

Further, the Ninth Circuit said, circuit precedent establishes that damage calculations alone can't preclude certification.

In Yokoyama v. Midland Nat'l Life Ins. Co., 594 F.3d 1087 (9th Cir. 2010), the Ninth Circuit held that the mere fact that different variables impact damage calculations doesn't defeat predominance. That case involved allegations that a life insurance company misrepresented the riskiness of annuities investments for seniors.

Google argued that the holding in Yokoyama was called into question by the U.S. Supreme Court's decision in Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).

In Comcast, a putative antitrust class action, the Supreme Court held that the plaintiffs' proposed damages model fell short of establishing that damages were capable of measurement on a classwide basis. “Questions of individual damage calculations will inevitably overwhelm questions common to the class,” where a damages model doesn't measure only those damages attributable to the legal theory of harm, the Comcast court held.

But the Ninth Circuit has continued to apply Yokoyama's central holding since Comcast, the court here said. Therefore, the district court erred in not applying Yokoyama.

Judges A. Wallace Tashima and Gordon J. Quist, sitting by designation from the Western District of Michigan, also served on the panel.

Schubert Jonckheer & Kolbe LLP in San Francisco represented the plaintiffs. Cooley LLP represented Google.

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The opinion is at