Google AdWords Case Deserves Class Status

     SAN FRANCISCO (CN) – A federal judge should not have denied class certification for Internet advertisers claiming that Google misled them as to what websites their ads would appear, the Ninth Circuit ruled Monday.
     Lead plaintiff Pulaski & Middleman sued Google over its AdWords program, an auction-based program through which Google served as an intermediary between website hosts and advertisers.
     According to the three-judge panel’s opinion, advertisers did not know in advance exactly where their ads would appear when they entered the program.
     Certain types of websites appeared in the AdWords registration process – such as search feed sites and content network sites – but others like parked domains and error pages did not.
     But the plaintiffs’ ads appeared on both parked domains and error pages, the opinion says, and they sued Google claiming violations of California’s unfair competition and fair advertising laws.
     A federal judge refused to grant the plaintiffs class certification, finding that individual questions predominated on the issue of restitution, but the Circuit reversed the court’s decision.
     In the panel’s 21-page opinion, Circuit Judge Richard Paez wrote that “to the extent that the district court rested its holding that common questions do not predominate on the putative class’s entitlement to restitution, it committed legal error.”
     A court “need not make individual determinations regarding entitlement to restitution,” Paez said.
     “Instead, restitution is available on a classwide basis once the class representative makes the threshold showing of liability under the unfair competition and fair advertising laws,” he said.
     Since the plaintiffs met this requirement, Paez said, Davila should not have held that individual questions predominate in the case.
     Paez cited the Circuit’s precedent ruling in a similar case, Yokoyama v. Midland National Life Insurance Co., in which it held that “damages calculations alone cannot defeat certification.”
     He also rejected Google’s argument that the plaintiffs’ proposed methods for calculating restitution were “arbitrary,” since “the calculation need not account for benefits received after purchase because the focus is on the value of the service at the time of purchase.”
     Instead, Paez said, “the focus is on the difference between what was paid and what a reasonable consumer would have paid at the time of purchase without the fraudulent or omitted information.”
     Since the plaintiffs’ alleged harm is Google’s placement of ads on lower-quality Web pages without the advertisers’ knowledge, and since Pulaski’s principal method for calculating restitution used Google’s own “Smart Pricing” ratio, “using a ratio from Google’s data that adjusts for Web page quality is both targeted to remedying the alleged harm and does not turn on individual circumstances,” Paez said.
     The panel remanded the case for further proceedings.
     Robert Schubert with Schubert Jonckheer in San Francisco represented the plaintiffs and told Courthouse News that he was “extremely pleased but not surprised” by the panel’s decision.
     Google could not be reached for comment.

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