Gurminder Singh v. Google LLC

Background

The case concerns Google’s AdWords advertising program, now known as Google Ads. Singh alleged that Google made false or misleading statements about two subjects: how effectively Google identified and filtered invalid or fraudulent clicks, and the percentage of all AdWords clicks that were invalid or fraudulent.

The challenged statements appeared on Google’s “Ad Traffic Quality Resource Center” and in a February 28, 2007 AdWords Blog post. The Resource Center stated that the vast majority of invalid clicks were caught by Google’s online filters and that invalid clicks averaged less than 10% of all AdWords clicks. The blog post made similar statements.

Singh asserted two claims under California statutes referred to in the opinion as the UCL and FAL. He sought certification of a nationwide class consisting of people and entities that advertised through AdWords and paid for clicks from Google’s Display Network at any time since June 1, 2012.

Standing

Google argued that Singh and proposed class members lacked standing because Singh had not shown that he paid for invalid traffic or relied on Google’s statements. Singh argued that he sought restitution for overpayments resulting from Google’s alleged misrepresentations.

The court exercised its discretion to decide Singh’s individual standing before class certification. It held that Singh had standing because he alleged and provided evidence that he purchased AdWords clicks, read the challenged statements, relied on them before signing up, and would not have paid as much if he had known the statements were misleading. Because the court denied class certification, Singh would remain the only plaintiff in the case, so the court did not decide whether all proposed class members had standing.

Rule 23(a) requirements

Federal Rule of Civil Procedure 23(a) requires numerosity, commonality, typicality, and adequacy.

The court found numerosity satisfied because Google had far more than 40 AdWords customers. It also found commonality satisfied. In the court’s view, whether Google misrepresented the average level of invalid clicks on AdWords was a question capable of classwide proof, even though that question alone would not establish Google’s liability to every advertiser.

The court found that Singh failed the typicality requirement. First, Singh had opted out of the AdWords arbitration clause and class-action waiver, while many or most proposed class members likely remained subject to those provisions. Singh could not challenge agreements he had not signed, even though the agreements could prevent many proposed class members from participating in the case.

Second, Singh’s alleged injury was not typical of the proposed class. The class included advertisers who might never have viewed the challenged webpages because those pages were not necessary to sign up for AdWords or place advertisements. Some advertisers also used agencies to place and manage their ads. In addition, the proposed class included advertisers with widely differing levels of advertising sophistication, making it unlikely that all would have understood or been misled by Google’s statements in the same way.

For similar reasons, the court found that Singh was not an adequate class representative. The proposed class included advertisers whose spending and sophistication differed substantially from Singh’s, and Singh’s decision to opt out of the arbitration clause and class-action waiver created an additional adequacy problem.

Rule 23(b)(3) requirements

The court separately examined Rule 23(b)(3), which requires common questions to predominate over individual questions and requires a class action to be superior to other methods of resolving the dispute.

The court concluded that individual issues would predominate. For claims based on affirmative or partial misrepresentations, the court would need to determine which advertisers saw the statements and relied on them. The statements appeared on two webpages that advertisers did not need to view to sign up for AdWords or place advertisements. The court therefore rejected a presumption that the proposed class members had been exposed to the statements.

The court also rejected Singh’s theory that Google had a general duty to disclose the actual effectiveness of its filters. The court stated that advertisers had access to the invalid-click rate for each campaign, and that the evidence did not show Google concealed that information. The varying sophistication of the proposed class members also created individual questions about whether they would consider the alleged omission important.

The court stated that the superiority requirement would have been satisfied if the other Rule 23 requirements had been met. However, the individual exposure questions would create management difficulties in a class action.

The court also found Singh’s damages model inadequate for class certification. His expert proposed calculating damages by comparing an estimated 14% actual fraudulent-click rate with Google’s stated 10% average. The court concluded that this model would make Google responsible for every undetected fraudulent click, effectively treating Google as a guarantor that all fraudulent clicks would be detected. Because Singh’s claims were based on statements about average invalid-click rates and the vast majority of invalid clicks—not a guarantee that all fraudulent clicks would be detected—the damages model was not tied to his liability theory.

Disposition

The court held that Singh did not satisfy the typicality or adequacy requirements of Rule 23(a), and did not satisfy the predominance requirement of Rule 23(b)(3). It ordered that Singh’s motion for class certification be DENIED. The existing case schedule remained in effect. The order did not resolve the merits of Singh’s individual claims.