Woods v. Google LLC
| Decision Date | 26 February 2019 |
| Docket Number | Case No. 5:11-cv-01263-EJD |
| Parties | RICK WOODS, et al., Plaintiffs, v. GOOGLE LLC, Defendant. |
| Court | U.S. District Court — Northern District of California |
Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), Defendant Google LLC ("Google") moves for an order (1) dismissing with prejudice Rene Cabrera's ("Cabrera") claims in the Fourth Amended Complaint and (2) dismissing with prejudice both Plaintiffs' Smart Pricing claims to the extent the claims are based on allegations that Google Smart Priced incorrectly or improperly (as opposed to not Smart Pricing at all). The motion was heard on January 10, 2019. For the reasons set forth below, Google's motion to dismiss is granted as to Cabrera's claims in the Fourth Amended Complaint and denied in all other respects.
Co-plaintiff Rick Woods filed his initial complaint in March 2011 alleging that Google bilked him and other advertisers into overpaying for advertising services through Google's AdWords program and pricing scheme. Dkt. No. 1. After several rounds of pleadings, Woods' allegations were pared down to the following. First, Woods states a plausible claim for breach of contract based upon Google's alleged failure to Smart Price clicks on the Display Network ("Smart Pricing claim"). Dkt. No. 122. The court found that the "measurements clause" of the AdWords Agreement could be reasonably interpreted as requiring Google to base its charges for Display Network clicks at least in part on the Smart Pricing formula. Second, Woods states a plausible claim for violation of the California Unfair Competition Law ("UCL") to the extent his claim is based upon location targeting ("location targeting claim").
Thereafter, the court disqualified Woods as a class representative. To preserve the class action, Woods and counsel added Cabrera as a named plaintiff in a Third Amended Complaint ("TAC"). In the TAC, Plaintiffs alleged that during the summer of 2008, Cabrera researched AdWords to determine whether to advertise his software consulting business through Google. TAC ¶ 4. Cabrera allegedly began advertising on AdWords on or about August 14, 2008 and continued advertising with Google until August 2009. TAC ¶ 8. In ruling on Google's motion to dismiss the TAC, the court (1) denied Google's motion to dismiss Cabrera's Smart Pricing claim and location targeting claim, (2) granted Google's motion to strike Woods's class allegations, and (3) directed Plaintiffs to file an amended complaint. Dkt. No. 395.
In October of 2018, Plaintiffs filed a Fourth Amended Complaint (Dkt. No. 405) and Google filed the instant motion to dismiss raising two primary arguments (Dkt. No. 432). First, Google asserts that Cabrera lacks Article III standing. According to Google, Cabrera's claims are based solely on alleged injuries to Cabrera's software consulting business, Training Options, Inc. ("Training Options"), and that recent discovery reveals that Cabrera sold Training Options nine years before he was named as a plaintiff. Second, Google contends that the Smart Pricing claim must be dismissed to the extent the claim is based on a breach of contract theory the court purportedly rejected in the summary judgment order (Dkt. No. 253).
"[T]hose who seek to invoke the jurisdiction of the federal courts must satisfy the threshold requirement imposed by Article III of the Constitution by alleging an actual case or controversy." City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983). "Plaintiffs must demonstrate a 'personal stake in the outcome' in order to 'assure that concrete adverseness whichsharpens the presentation of issues' necessary for the proper resolution of constitutional questions." Id. Stated differently, "[s]tanding addresses whether the plaintiff is the proper party to bring the matter to the court for adjudication." Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010).
To establish Article III standing, a plaintiff must show (1) it has suffered an "injury in fact" that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)); see also In re Zappos.com, Inc., 888 F.3d 1020, 1024 (9th Cir. 2018). A plaintiff must establish standing as of the filing of the complaint. Hernandez v. County of Monterey, 70 F. Supp. 3d 963, 969-70 (N.D. Cal. 2014) (citing County of Riverside v. McLaughlin, 500 U.S. 44, 51-52 (1991)).
Lack of Article III standing requires dismissal for lack of subject matter jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). "A Rule 12(b)(1) motion can be made as a speaking motion—or factual attack—when the defendant submits evidence challenging the jurisdiction along with its motion to dismiss." Norkunas v. Wynn Las Vegas, LLC, 343 Fed. Appx. 269, 270 (9th Cir. 2009) (citing Thornhill Publ'g Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979)). "A proper speaking motion allows the court to consider evidence outside the complaint without converting the motion into a summary judgment motion." Id. (citing Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)).
Once a defendant makes a speaking motion to dismiss pursuant to Rule 12(b)(1), "the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Id. (quoting Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039-40, n. 2 (9th Cir. 2003). In resolving a factual attack on jurisdiction, the court may consider evidence beyond the complaint without converting the motion into a motion forsummary judgment. Safe Air, 373 F.3d at 1039. Further, the court need not presume the truthfulness of the plaintiff's allegations. Id.
Once a defendant moves to dismiss for lack of subject matter jurisdiction, the plaintiff has the burden of establishing the court's jurisdiction. See Chandler, 598 F.3d at 1122. The plaintiff meets that burden by putting forth "the manner and degree of evidence required at the successive stages of the litigation." Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). At the pleading stage, general factual allegations of injury may suffice. Id. In response to a motion for summary judgment, however, plaintiff must present specific facts to establish injury. Id.
Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). A complaint which falls short of the Rule 8(a) standard may therefore be dismissed if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). When deciding whether to grant a motion to dismiss, the court must accept as true all "well pleaded factual allegations" and determine whether the allegations "plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). The court must also construe the alleged facts in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989).
In considering this "speaking motion" to dismiss, the court has reviewed the evidence submitted by both parties and finds that Cabrera is not the proper party to bring the claims in the Fourth Amended Complaint.
Cabrera testified that the "software consulting business" referred to in the Fourth Amended complaint is his company, Training Options. Evans Decl. ¶ 4, Ex. 3 (Cabrera Tr. at 60:7-19). Cabrera also testified that Training Options bought the ads that are the subject of this lawsuit. Id. at 62:1-4, 63:5-7, 64:2-4. Further, Cabrera testified that he used AdWords solely for Training Options (id. at 58:1-59:1) and stopped advertising with AdWords before he sold his business (id. at 66:16-18). Thus, Training Options, and not Cabrera, sustained the alleged injury resulting from the alleged overpayment of advertising services through Google's AdWords program and pricing scheme.
That Cabrera used his personal email and his personal AdWords account to access Google's AdWord program is irrelevant to the issue of standing. As stated previously, Training Options bought the ads. Further, all of the AdWords advertising at issue was done by and for the benefit of Training Options. Therefore, Training Options is the entity who allegedly overpaid for the ads and allegedly sustained an injury, not Cabrera. Cabrera's AdWords account provided only the means or vehicle through which the ads were disseminated over the Internet.
It is undisputed that Cabrera sold his Training Options business in August 2009. Evans Decl. ¶ 2, Ex. 7 (Dkt. No. 432-1). The Standard Asset Purchase Contract and Receipt ("APA") identifies Training Options as the "Seller" and "Martin Peen and assigns" as the "Buyer." Id. The APA states in relevant part that "Seller shall sell and Buyer shall purchase, the business known as: Training Options . . . including certain assets, which include all furniture,...
To continue reading
Request your trial