CLRB Hanson LLC et al. V. Google Class Action Settlement

The settlement was reached only after the parties conducted arduous arm’s-length negotiations over a period of two months.  Representative Plaintiffs’ Counsel have determined that the settlement was fair, reasonable and adequate and in the best interest of the Class.

The Court has certified a Settlement Class defined as: all persons and entities residing in the United States who have paid Google for advertising pursuant to Google’s AdWords program who (a) became AdWords advertisers between June 1, 2005 and February 28, 2009, inclusive, and who were charged more than their per day Daily Budget on any day during that time period; or (b) paused their AdWords advertising campaigns on any day during the period from January 1, 2002 to February 28, 2009, inclusive, and during the same billing period when their AdWords advertising campaigns were paused, were charged more than the product of their per day Daily Budget times the number of days that such Class Members’ advertising campaigns were not paused during that billing period.  Excluded from the Class are Resellers, defined as persons or entities whose regular business activities include placing ads on Google’s AdWords program on behalf of otherwise unaffiliated persons or entities.

On May 4, 2006, Representative Plaintiffs filed their Second Amended Class Action Complaint, which is the operative complaint in the Action, which alleges five causes of action: (1) Breach of Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3) Violations of Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”); (4) Violation of Cal. Bus. & Prof. Code § 17500, et seq. (“FAL”); and (5) Unjust Enrichment.  In their Complaint, the Representative Plaintiffs sought damages, restitution, and injunctive relief to remedy Google’s practice of (1) charging its AdWords advertisers up to 120% of their per day daily budget on any given day (Plaintiffs’ “120% claims”); and (2) charging AdWords customers who paused their campaigns more than their per day Daily Budget times the number of days their campaigns were not paused during the billing period (Plaintiffs’ “pausing claims”).

Google filed four separate motions for partial summary judgment.  The Court dismissed the Representative Plaintiffs’ Second and Fifth Causes of action for breach of the implied covenant of good faith and fair dealing and unjust enrichment.  Google also successfully argued that its practice of charging AdWords Advertisers up to 120% of their daily budget on any given day does not, in and of itself, constitute breach of contract.  The Court held that triable issues of fact existed as to whether Google’s practice of charging up to 120% of an AdWords Advertiser’s per day Daily Budget violates the UCL and FAL and whether Google’s pre-September 2006 pausing practices constitute a breach of contract.

Counsel for the parties conducted extensive settlement negotiations to achieve the settlement described herein.  The settlement was reached only after the parties conducted arduous arm’s-length negotiations and after the parties conducted extensive pre-trial discovery.  During the course of this Action, Google produced hundreds of thousands of pages of documents, responded to multiple interrogatories, and Google employees testified at deposition.  In addition, Representative Plaintiffs produced documents to Google, responded to interrogatories, and testified at deposition.

In determining to settle the Action, Representative Plaintiffs and Representative Plaintiffs’ Counsel have taken into account the substantial expense and length of time necessary to prosecute the litigation through complete pretrial discovery, trial, post-trial motions and likely appeals, taking into consideration the significant uncertainties in predicting the outcome of this complex litigation.  Representative Plaintiffs’ Counsel believes that the settlement described herein provides substantial benefits to the Class.  Based on their consideration of all of these factors, Representative Plaintiffs and Representative Plaintiffs’ Counsel have concluded that it is in the best interests of the Class to settle the Action on the terms described herein, subject to the approval of the Court.

Representative Plaintiffs recognized the uncertainty and risk of the outcome of any litigation, especially complex litigation such as this, and the difficulties and risks inherent in the trial of such an action.  Representative Plaintiffs desired to settle the claims of the Class against Google on the terms and conditions described herein which provide substantial and immediate benefits to the Class.  Representative Plaintiffs’ Counsel deems such settlement to be fair, reasonable and adequate to, and in the best interests of, the members of the Class.

Google, while continuing to deny all allegations of wrongdoing or liability, desired to settle and terminate all existing or potential claims against it without in any way acknowledging fault or liability.  During the course of the litigation, Google, in addition to denying any liability, disputed that Representative Plaintiffs and the Class were damaged by any wrongful conduct on its part.  The settlement provides immediate and substantial benefits to the Class and avoids the risks that liability or damages might not be proven at trial.

THE COURT HAS NOT FINALLY DETERMINED THE MERITS OF REPRESENTATIVE PLAINTIFFS’ CLAIMS OR THE DEFENSES THERETO.  THIS NOTICE DOES NOT IMPLY THAT THERE HAS BEEN OR WOULD BE ANY FINDING OF VIOLATIONS OF LAW OR THAT RECOVERY COULD BE OBTAINED IN ANY AMOUNT IF THE ACTION WERE NOT SETTLED.

The settlement will release Representative Plaintiffs’ and Class Members’ Released Claims against the Google.  The Released Claims are defined as: any and all claims, demands, actions, causes of action, rights, offsets, suits, damages, lawsuits, liens, costs, losses, expenses or liabilities of any kind whatsoever, for any relief whatsoever, including monetary, injunctive or declaratory relief, or for reimbursement of attorneys’ fees, costs or expenses, which the Representative Plaintiffs or any Member of the Class which were or could have been asserted based on the allegations set forth in the complaints filed by the Representative Plaintiffs in the Action, specifically including any and all claims based on a Class Member being charged more than his, her, or its Daily Budget.

Upon the Effective Date of the settlement, the Representative Plaintiffs and Class Members on behalf of themselves, their heirs, executors, administrators, successors, assigns, employees, officers, directors, attorneys, representatives, affiliates, agents, and any persons or entities they represent, shall be deemed to release and forever discharge Google from all Released Claims, and shall forever be barred and enjoined from prosecuting, commencing, instituting or asserting all or any of the Released Claims in any action or other proceeding in any court of law asserting all or any of the Released Claims in any action or other proceeding in any court of law or equity, arbitrational tribunal, administrative or other forum, whether directly, representatively, derivatively, or in any other capacity against Google.

If the settlement is approved by the Court, all claims which have or could have been asserted in the Action will be dismissed on the merits and with prejudice as to all Class Members and all Class Members shall be forever barred from prosecuting a class action or any other action raising any Released Claims against Google.

The settlement will become effective at such time as Final Judgment entered by the Court approving the settlement shall become final and not subject to appeal (the “Effective Date”).

2. Upon final approval of the settlement by the Court and the satisfaction of the other conditions to the effectiveness of the Settlement, the Settlement Proceeds will be allocated under the Court’s direction and supervision, as follows:

a. To pay the fees, expenses and costs of Representative Plaintiffs’ Counsel as and to the extent allowed by the Court;

b. To pay an incentive compensation award to each Representative Plaintiff to the extent allowed by the Court; and

c. To pay all costs and expenses reasonably incurred in connection with the preparation and filing of tax returns and          the payment of taxes on the interest earned on the Settlement Proceeds, including all taxes and tax expenses.

3. Subject to the approval by the Court of the Plan of Allocation described below, the balance of the Settlement Proceeds remaining after the payment of the foregoing fees, costs, expenses and taxes (the “Net Settlement Proceeds”) shall be distributed in the form of cash or AdWords Credits as set forth below, to Class members who have not requested exclusion from the class in accordance with the instructions contained in this Notice.  The following methodology shall be used to calculate the distribution to each Class member:

To be effective, any request for exclusion from the Class must be in writing and must include the name, email address, AdWords account number, and mailing address of the person seeking to opt out, the dates that the person was an AdWords Advertiser, and a statement that the person wishes to be excluded from the Class, and must be signed by or on behalf of the person so requesting exclusion and sent via first-class mail to:

At the Settlement Hearing, any Class member who has not filed a proper request for exclusion from the Class may appear in person or by counsel and be heard to the extent allowed by the Court in opposition to the fairness, reasonableness and adequacy of the Settlement, the Plan of Distribution, or the application of Representative Plaintiffs’ Counsel for an award of attorney’s fees and expenses and for an incentive compensation award to Representative Plaintiffs, provided, however, that in no event shall any person or entity be heard in opposition to the Settlement, the Plan of Distribution, or Representative Plaintiffs’ Counsel’s application for attorney’s fees and expenses and for an incentive compensation award to Representative Plaintiffs, and in no event shall any paper or brief submitted by any such person be accepted or considered by the Court, unless, the objection is filed with the Court and served on Representative Plaintiffs’ Counsel and Google’s Counsel so that it is received no later than July 14, 2009.  Any such objection shall include all briefs or other papers to be considered by the Court, and must include the name and address of the person and the dates that the person was an AdWords Advertiser, and must be

ALL INQUIRIES CONCERNING THIS NOTICE OR THE PROOF OF CLAIM FORM BY CLASS MEMBERS SHOULD BE MADE TO THE CLAIMS ADMINISTRATOR.  PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE FOR INFORMATION.