On January 10, 2022, Judge Beth Labson Freeman of the United States District Court for the Northern District of California denied Plaintiff’s motion for class certification in a case stemming from allegations that Google misled advertisement purchasers about the rate of “false clicks” on its platform. The court’s order provides a helpful roadmap for defeating class certification in consumer fraud cases arising under California law. Perhaps most notably, the court concluded that the named plaintiff was atypical and inadequate because (i) as a small business owner, his level of marketing sophistication differed from larger advertisers and (ii) he opted out of an arbitration clause that would likely govern a majority of the class members’ claims.

• Google sells to individuals and businesses of all sizes pay-per-click advertisements that appear across the Google platform. Plaintiff Gurminder Singh, a small business owner, signed up for this service, agreeing to pay Google for clicks on the advertisements it ran for his business on its platform.
• Plaintiff filed suit against Google, arguing that Google deceives individuals and businesses who sign up for this service by making false or misleading statements about (1) how effectively Google identifies and filters out invalid and fraudulent clicks on advertisements; and (2) the proportion of total clicks that constitute invalid or fraudulent clicks. Specifically, Plaintiff pointed to two sets of challenged statements, one which appeared in Google’s “Ad Traffic Quality Resource Center” (“ATQRC”) and another which appeared in a blog post written by Google. According to Plaintiff, these statements were material because they were “intended to convince advertisers to sign up” for Google’s service and “impress upon the reader” that Google’s systems were “adequately tackling the scourge of click fraud.”
• Plaintiff sought certification of a class defined as “all persons and entities throughout the United States who advertised through Google’s [program] and paid for clicks on their [ ] advertisement(s) at any time since June 1, 2012” based on claims asserted for alleged violations of California’s Unfair Competition Law (“UCL”) and False Advertising Law (“FAL”).
• The court denied Plaintiff’s motion for class certification, finding that (1) Plaintiff’s claims were not typical of the claims of the putative class; (2) Plaintiff would not adequately represent the absent class members; and (3) common issues did not predominate.
  • As to typicality, the court concluded that Plaintiff’s claims suffered from two defects:
    • First, Plaintiff opted out of the arbitration clause to which most of the putative class members were subject, and thus could not challenge it. Yet the putative class members who did not opt out would need to overcome the arbitration clause to pursue their claims.
    • Second, as to Plaintiff’s misrepresentation theory, Plaintiff’s alleged injury was not typical. Individuals and businesses were not required to read ATQRC or the blog post to sign up for Google’s service. Thus, there was no evidence that all members of the putative class were exposed to the alleged misrepresentations. And although Plaintiff pled an omission-based theory, that theory was a “partial omission” theory that likewise depended on exposure to the alleged misrepresentations.
    • Plaintiff’s claims were also not typical of the claims of the putative class for a different reason: the putative class consisted of members of varying levels of sophistication, many of whom were likely to have “a degree of preexisting marketing experience” that would preclude them from developing a false impression about Google’s ability to filter false or fraudulent clicks.
  • Moreover, the court concluded that these typicality deficiencies similarly precluded Plaintiff’s ability to satisfy the adequacy requirement.
  • Finally, as to predominance, the court found that the question of whether individual class members were exposed to the alleged misrepresentations at issue would predominate over common issues.
    • The court rejected Plaintiff’s argument that he need not prove individual reliance on the alleged misrepresentations under the California Supreme Court’s decision in Tobacco II, finding that Tobacco II’s presumption of reliance “was in the context of a ‘decades-long’ tobacco advertising campaign where there was little doubt that almost every class member had been exposed to [the tobacco companies’] misleading statements.” In this case, however, the statements at issue were “buried on two pages on Google’s website, neither of which need[ed] to be viewed by an advertiser to sign up” for Google’s service. Because Plaintiff could not show that the class consisted only of “members who were exposed to advertising that [was] alleged to be misleading,” common issues did not predominate.
    • Plaintiff’s pure omissions theory also failed. First, Google gave each advertiser access to the actual percentage of false/fraudulent clicks detected on its advertisements. Thus, Google did not have “exclusive knowledge” of the incidence of false/fraudulent clicks, nor did it actively conceal that information. Second, Plaintiff failed to satisfy the materiality requirement because he could not show that a reasonable advertiser would “attach importance” to average efficacy data of Google’s click filters “where that advertiser has access to the actual efficacy of the click filters per campaign that the advertiser runs.”
• Because the court found that the requirements of Rule 23 were not satisfied, the court did not perform a detailed analysis of whether Plaintiff’s proposed damages model complied with the requirements established by the Supreme Court in Comcast Corp. v. Behrend. But the court nonetheless concluded that Plaintiff’s damages theory was not tethered to his theory of liability, because it would effectively “make Google a guarantor that advertisers never pay for a fraudulent click,” and Plaintiff’s claims were not based on any guarantee that Google made.
• Judge Freeman’s opinion provides a strong roadmap for defeating class certification in consumer fraud class actions where the alleged misrepresentations appear on websites or advertisements as opposed to the product label. The court’s analysis of the typicality and adequacy requirements are particularly noteworthy:
  • Courts frequently apply a lax standard to typicality, reasoning that so long as class members pursue recovery under the same legal theory, they have satisfied Rule 23(a)(3)—and differences in the amount of class members’ purchases are purely a question of damages that does not preclude certification. But Judge Freeman’s analysis underscores that differences in the types of entities who comprise the class—even if they purchased the same product and pursue recover under the same legal theory—may render a named plaintiff atypical if their level of sophistication or susceptibility to being “misled” varied from other class members. Defendants should seek to bolster this evidence, where possible, by conducting consumer surveys showing that purchasers differ in their understanding of the marketplace, expectations for the product, exposure to advertising, and perspectives on the materiality of certain disclosures.
  • Finally, defendants should be cognizant of arbitration agreements that might apply to the claims of certain class members. Even if the named plaintiff opts out, the existence of such an agreement can defeat typicality and render the plaintiff inadequate to represent the putative class.

The case is Singh v. Google LLC. Read the court’s opinion here.