AdTrader, Inc. v. Google LLC

Background

Plaintiffs brought a proposed class action alleging that Google failed to provide full refunds or credits to advertisers for invalid activity detected on Google’s advertising platforms. The claims focused on advertisers using AdWords to buy advertising inventory from publishers through Google’s DoubleClick Ad Exchange, now referred to in the opinion as AdX. Plaintiffs alleged that Google breached the AdWords Agreement and violated California’s False Advertising Law and Unfair Competition Law by withholding payment from publishers for invalid traffic while not fully refunding or crediting advertisers for that same traffic.

The court had previously certified an AdWords class under Federal Rule of Civil Procedure 23(b)(3). After years of litigation, substantial discovery, and pending summary-judgment motions, the parties reached a settlement. The settlement provides a non-reversionary $7 million fund, distributed on a claims-made basis. Each claimant with a valid claim will receive a proportional share based on the claimant’s AdWords advertising spending on AdX publishers’ webpages during the relevant period, compared with the total qualifying spending of all claimants with valid claims.

Final Approval of the Settlement

The court considered whether the class continued to satisfy Rule 23’s requirements and whether the settlement was fair, reasonable, and adequate. It found that the class was sufficiently numerous, that common legal and factual questions predominated, that SCB’s claims were typical, and that SCB and class counsel adequately represented the class. The court also found that a class action was the superior method for resolving the dispute because individual recoveries were relatively small and the class action was manageable.

The court found that notice was adequate. Direct email or postcard notice reached approximately 95.6% of the settlement class. The administrator received 84,335 claims, of which 4,838, covering 8,503 Customer IDs, were determined to be valid. The administrator also received 17 exclusions and one objection.

Applying the factors used by the Ninth Circuit to evaluate class settlements, the court found that the settlement was fair, adequate, and reasonable. The court considered the risks, expense, complexity, and likely duration of continued litigation; the settlement amount; the extensive discovery; counsel’s experience and views; and the class’s response. The court noted that the average award was expected to be approximately $430 per class member and that only one objection had been filed.

The objector, Robert J.A. Gilbert, argued that he could not determine his precise benefit, that he had not received conversions from advertisements he posted, and that Google had disadvantaged his website or brand. The court concluded that these concerns largely involved services and harms outside the issues in this lawsuit. It therefore overruled his objections.

The court granted Plaintiffs’ Motion for Final Approval of Settlement. The opinion approved the settlement but did not make a final merits determination that Google breached the agreement or violated California law.

Attorneys’ Fees, Expenses, and Service Award

Class counsel requested $2,310,000 in attorneys’ fees, equal to 33% of the $7 million settlement fund, plus $831,186.02 in expenses. The court approved the expenses after reviewing counsel’s itemized costs and finding that they were necessary to the litigation.

The court also found the requested attorneys’ fees reasonable. A lodestar cross-check—an estimate based on reasonable hours multiplied by reasonable hourly rates—resulted in a lodestar of $3,650,815 and supported the requested fee. Although 33% exceeded the 25% benchmark commonly used in the circuit, the court found the amount justified by counsel’s significant work, the risks of the contingency representation, and the results achieved.

SCB requested a $10,000 service award. The court found that SCB’s representative had participated in calls with counsel, provided records, reviewed draft discovery responses, prepared for and attended a deposition, traveled overnight for the deposition, and participated in mediation. The court also considered the length of the case and SCB’s public involvement. It approved the requested $10,000 award.

Order

The court granted the Motion for Final Approval of Settlement; approved $2,310,000 in attorneys’ fees; approved $831,186.02 in expenses; approved a $10,000 service award for SCB; and approved the timely requests for exclusion identified in Exhibit A to the judgment. Judge Beth Labson Freeman signed the order on November 1, 2022.