April 1, 2016

Searching for an answer: Google petitions the Supreme Court

By Deborah J. La Fetra Senior Attorney

Last week, the Supreme Court issued its narrow decision in Tyson v. Bouaphakeo, allowing class certification in a case dependent on statistical sampling to prove liability in limited circumstances. PLF’s amicus brief in the case argued that statistical sampling is irreconcilable with due process protections that require plaintiffs to demonstrate individual injuries and permit defendants to raise individual defenses. The court foreswore a bright line rule, ensuring future litigation over the use and abuse of statistical models in class action litigation. As is so often true, the future is now. At least two cert petitions are pending before the Court, asking it to fill in some of the blanks left by the narrow Tyson opinion: Wal-Mart Stores, Inc. v. Braun, which is set for conference today (after being relisted 4 times), and Google Inc. v. Pulaski & Middleman LLC, which is in the middle of petition-stage briefing. Today, PLF filed an amicus brief supporting Google’s petition because the increasing use of statistical modeling in lieu of individual proof has troubling implications for due process.

The plaintiffs in that case purportedly represent a class of hundreds of thousands of advertisers who contracted with Google over the course of several years. They allege that their advertisements were improperly located on low-traffic websites, in violation of California’s Unfair Competition Law and False Advertising Law. The class proposed a formula for restitution that would apply a uniform discount on all ads placed on the lower-value pages in lieu of individual determinations of damages. The trial court rejected this proposal, in part because the need for individual calculation of restitution predominated over common issues. The Ninth Circuit reversed, applying its own categorical rule that individual damages issues can never defeat class certification. Tyson did not consider the effect of such a categorical rule, which would prevent a court from even considering whether individual questions of damages predominate over common questions of liability.

The Ninth Circuit’s categorical approach is particularly insidious because that court employs a two-step sleight of hand to ensure its ability to certify classes regardless of individual claims or damages. For example, in Jimenez v. Allstate Ins. Co., the court foreclosed the defendant’s ability to raise individualized liability defenses because the defendant retained the right to “raise any individualized defense it might have at the damages phase of the proceedings” instead. The Ninth Circuit thus essentially reclassified liability defenses as damages issues for the purpose of shuttling all claimant-specific defenses to the damages phase of class proceedings. But, according to the categorical rule in Google, the “reserved” right to challenge class certification is extinguished precisely because it arises in the context of damages. The Ninth Circuit frequently applies overly lax standards to consumer class certification, adversely affecting the economies of the western states and companies nationwide that do business in those states. Class certification is appropriate only when common questions predominate over individual questions. Tyson did not resolve this issue; the Google petition gives the Court another chance.

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