Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Google seeks High Court review in AdWorks suit, (Mar 4, 2016)

By Greg Hammond, J.D.

Google Inc. is asking the U.S. Supreme Court to review a decision by the U.S. Court of Appeals in San Francisco, ruling that the district court erred in finding that a putative class did not meet the predominance requirement of Federal Rule of Civil Procedure 23(b). Advertisers claimed that Google violated the California Unfair Competition Law (UCL) and False Advertising Law (FAL) by failing to disclose that certain ads paid for by the advertisers had been placed on websites that were dormant or otherwise unlikely to be seen (Google Inc. v. Pulaski & Middleman, LLC, Dkt. 15-1101).

The putative class action arose from advertisers’ use of the Google AdWorks program during the period of July 2004 through March 2008. The auction-based AdWorks program placed Google as the intermediary between advertisers and website hosts. Advertisers could request that their ads be placed on Search Feed sites—those that displayed ads alongside search results—or Content Network sites—those that displayed ads in full content websites—or both. The action alleges that Google violated the UCL and FAL by failing to disclose during the relevant time period that some of the paid for ads had been placed on much less valuable locations for advertising, such as Parked Domains—undeveloped sites without content—and Error Pages.

The district court ruled against plaintiffs’ motion for class certification, finding that the plaintiffs failed to meet the predominance requirement of Rule 23(b) because common questions did not predominate on the issues of entitlement to restitution and amount of restitution due each class member. The appellate court, however, reversed the lower court’s decision, holding that the district court erred by conflating the restitution calculation with the liability inquiry for UCL and FAL claims and by failing to follow the rule that damages calculations alone cannot defeat class certification.

Google now asks the Supreme Court to review the appellate court’s decision, arguing that the decision departs from the fundamental principles of class certification that the Supreme Court laid down in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In particular, Google asserts that the Supreme Court should grant review to decide whether individual damage calculations alone can overwhelm questions common to the class and to decide whether plaintiffs may use formulas based on the average class member’s experience as common proof of damages.

The questions presented are: (1) Whether individual damage calculations alone can overwhelm questions common to the class, precluding certification under Rule 23(b)(3); and (2) Whether plaintiffs may use a formula that relies on a uniform measure of harm derived from the average experience of all class members as common proof of damages.

Attorneys: Neal Kumar Katyal (Hogan Lovells US LLP) and Michael G. Rhodes (Cooley LLP) for Google Inc.

Companies: Google Inc.; Pulaski & Middleman, LLC

News: Advertising