In re Google Digital Advertising Antitrust Litigation

Background

Certain plaintiffs in the coordinated multidistrict litigation asked for partial summary judgment based on issue preclusion, a rule that can prevent a party from relitigating an issue already decided in an earlier case. They relied on Judge Leonie Brinkema’s findings after a trial in a related action brought by the United States and several states in the Eastern District of Virginia. That court found that the relevant geographic market for publisher ad servers and ad exchanges used in open-web display advertising was worldwide, subject to specified exceptions.

The plaintiffs’ existing pleadings in this multidistrict litigation alleged that the relevant geographic market was the United States. The Advertiser Class, Publisher Class, Inform, the Daily Mail, and Gannett moved to amend their pleadings principally to allege a worldwide market as an alternative to a United States market. In one instance, the proposed pleading alleged a worldwide market with a United States submarket. The Publisher Class also noted that conforming the pleadings to Judge Brinkema’s findings could affect Google’s arguments against issue preclusion.

Google’s objections

Google opposed the amendments. It argued that the motions were filed more than two years after the scheduling deadline for amendments, that expanding the allegations would prejudice its ability to defend against a worldwide market, and that the proposed amendments were futile. Google also argued that the geographic market in this litigation differed from the market addressed in the Eastern District of Virginia action.

Court’s analysis

The court concluded that Google would suffer no unfair legal prejudice from allowing the alternative worldwide-market allegations. Google had conducted discovery and defended against claims involving a United States or worldwide market in the related action. Google’s experts had also analyzed both markets in the related action and in this multidistrict litigation. The court said that any prejudice based on potentially making Google’s issue-preclusion argument moot was not a legally cognizable form of unfair prejudice.

The court also found good cause to permit the amendments under Federal Rule of Civil Procedure 16(b)(4), which allows a scheduling order to be changed for good cause and with the judge’s consent. Although the amendments followed the original deadline, the court had invited motions to conform the pleadings to Judge Brinkema’s findings and had established a new schedule. The plaintiffs moved under that new schedule. The court considered the timing of the ongoing expert discovery, class-certification briefing, and summary-judgment briefing, and concluded that allowing the amendments would further the goal of resolving the litigation fairly, promptly, and inexpensively.

The court rejected Google’s futility argument. Under Federal Rule of Civil Procedure 8(d)(2), parties may plead alternative statements when at least one alternative is sufficient. The court held that pleading a worldwide market as an alternative to a United States market, or alleging a worldwide market with a United States submarket, would survive a motion to dismiss. The court did not decide whether the plaintiffs’ pending motions for partial summary judgment based on issue preclusion were appropriate.

Ruling

Judge Castel granted the motions of the Advertisers Class, Publishers Class, Inform, the Daily Mail, and Gannett to amend their complaints in the forms identified in their proposed amendments. The amended pleadings were ordered filed within seven days, and answers were due within fourteen days after filing. The motions to seal submissions supporting or opposing the motions to amend were provisionally granted. The order did not resolve the pending issue-preclusion motions for partial summary judgment or decide the merits of the antitrust claims.