Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-16752/USCOURTS-ca9-12-16752-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PULASKI & MIDDLEMAN, LLC; JIT

PACKAGING, INC.; RK WEST, INC.;

RICHARD OESTERLING,

Plaintiffs-Appellants,

v.

GOOGLE, INC., a Delaware

corporation,

Defendant-Appellee.

No. 12-16752

D.C. No.

5:08-cv-03369-

EJD

OPINION

Appeal from the United States District Court

for the Northern District of California

Edward J. Davila, District Judge, Presiding

Argued and Submitted

December 9, 2014—San Francisco, California

Filed September 21, 2015

Before: A. Wallace Tashima and Richard A. Paez Circuit

Judges and Gordon J. Quist,* Senior District Judge.

Opinion by Judge Paez

* The Honorable Gordon J. Quist, Senior District Judge for the U.S.

District Court for the Western District of Michigan, sitting by designation.

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2 PULASKI & MIDDLEMAN V. GOOGLE

SUMMARY**

Class Action / Restitution

The panel reversed the district court’s denial of class

certification in an action brought by a putative class of

internet advertisers under California’s Unfair Competition

Law and Fair Advertising Law, alleging that Google, Inc.

misled them; and remanded for further proceedings.

The plaintiff alleged that Google misled advertisers by

failing to disclose the placement of AdWorks ads on parked

domains and error pages; and sought, on behalf of the

putative class, restitution of moneys Google wrongfully

obtained from the putative class. 

The panel held that the district court erred in denying

class certification based on its finding that the putative class

did not meet the predominance requirement under Fed. R.

Civ. P. 23(b)(3). The panel held that the district court erred

by conflating restitution calculation with the liability inquiry

for Unfair Competition Law and Fair Advertising Law

claims, and by failing to follow the rule in Yokoyama v.

Midland National Life Insurance Co., 594 F.3d 1087, 1094

(9th Cir. 2010) (holding that damages calculations alone

cannot defeat class certification). The panel further held that

the plaintiff’s proposed method for calculating restitution was

not “arbitrary” under Comcast Corp. v. Behrend, 133 S. Ct.

1426 (2013).

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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PULASKI & MIDDLEMAN V. GOOGLE 3

COUNSEL

Miranda P. Kolbe (argued), Robert C. Schubert, and Willem

F. Jonckheer, Schubert Jonckheer & Kolbe LLP, San

Francisco, California, for Plaintiffs-Appellants.

Michael G. Rhodes (argued), Whitty Somvichian, and Kyle

C. Wong, Cooley LLP, San Francisco, California; Heather

Meservy, CooleyLLP, San Diego, California, for DefendantAppellee.

OPINION

PAEZ, Circuit Judge:

Between 2004 and 2008, many online internet advertisers

used Google, Inc.’s (“Google”) AdWords program, an

auction-based program through which advertisers would bid

for Google to place their advertisements on websites. Pulaski

& Middleman, LLC and several other named plaintiffs

(“Pulaski”)1brought this putative class action under

California’s Unfair Competition and Fair Advertising Laws,

alleging that Google misled them as to the types of websites

on which their advertisements could appear. The putative

class initially sought injunctive and restitutionary relief. 

After Google changed certain features of the AdWords

program, Pulaski, upon filing a Third Amended Consolidated

Class Action Complaint, abandoned the claim for injunctive

1 Hereafter, “Pulaski” refers collectively to Pulaski & Middleman, LLC

and the other named plaintiffs, JIT Packaging Inc., RK West, Inc., and

Richard Oesterling.

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4 PULASKI & MIDDLEMAN V. GOOGLE

relief. The only relief the putative class now seeks is the

equitable remedy of restitution.

Pulaski appeals the district court’s denial of class

certification. The district court held that on the claim for

restitution, common questions did not predominate over

questions affecting individual class members. In denying

certification, the court reasoned that it was not bound by our

decision in Yokoyama v. Midland National Life Insurance

Co., 594 F.3d 1087, 1094 (9th Cir. 2010). It then explained

that determining which class members are entitled to

restitution and what amount each class member should

receive would require individual inquiries that “permeate the

class claims.”

Pulaski argues that the district court erred in failing to

follow Yokoyama. As explained below, we agree. We

therefore reverse the denial of class certification and remand

for further proceedings.

I. Background

A.

This case concerns Google’s AdWords program, an

auction-based program through which Google served as an

intermediarybetween website hosts and advertisers. Through

AdWords, internet advertisers provided advertisements to

Google and its third party website-owner partners. To

participate, advertisers entered Google-defined variables into

the AdWords interface on Google’s website, including the

maximum price per ad they would be willing to pay and their

overall budget. They also selected which Google-defined

categories of websites they wanted to display the ad. 

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PULASKI & MIDDLEMAN V. GOOGLE 5

Afterwards, using an auction-based algorithm, AdWords

determined the online placement and price of the ad. Thus,

during the class period, advertisers did not know in advance

exactly where their ads would appear.

Advertisers paid a particular price to Google each time an

Internet user “clicked” on their displayed ad. The price of a

particular click depended on several factors: the maximum

bids of other AdWords customers for clicks based on the

same search term, a “quality score” of the advertisement, and

a “Smart Pricing” discount applied to the website where the

ad had been placed. Google created and instituted Smart

Pricing, an internally-calculated price adjustment, to adjust

the advertiser’s bids to the same levels that a “rational

advertiser” would bid if the rational advertiser had sufficient

data about the performance of ads on each website. Smart

Pricing is a ratio calculated by dividing the conversion rate2

for the lower-quality website by the conversion rate for the

same ad on google.com.

There are several categories of websites in play. During

the class period, an advertiser using AdWords could request

that its ads appear on Search Feed sites, Content Network

sites, or both. Search Feed sites display AdWords ads along

with search results after a user searches for information using

a particular search term. After entering a particular term, a

user would be presented with both ordinary search results and

ads related to the search term. Content Network websites, on

the other hand, are full content sites, like nytimes.com, that

2 Using Google’s terminology, a “conversion” occurs when a “click”

leads to a particular business result defined by the advertiser, like a

purchase or a sign-up. A conversion rate is the “number of conversions

divided by the number of ad clicks over a defined period of time.”

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6 PULASKI & MIDDLEMAN V. GOOGLE

publish information independent of search results. Ads

would appear on these sites if the ad’s keywords matched

those of the website.

There are other categories of sites that did not appear in

the AdWords registration process: parked domains and error

pages. Parked domain pages are undeveloped domains whose

pages appear when users type generic terms into a web

browser. These are pages of ads without content. Error

pages appear when a person inputs an unregistered web

address, or something other than a web address, into a web

browser’s address bar. Typing this information into an

address bar used to result in error messages, but during the

class period inputting this information resulted in error pages

that offered ads. Even though only Search Feed and Content

Network websites were listed in the AdWords registration

process, AdWords ads appeared on both parked domains and

error pages.

B.

Pulaski alleges that Google misled advertisers, violating

California’s Unfair Competition Law (“UCL”), Cal Bus. &

Prof. Code § 17200 et seq.,

3

and California’s Fair Advertising

Law (“FAL”), § 17500 et seq., by failing to disclose the

placement of AdWords ads on parked domains and error

pages. The putative class consists of “[a]ll persons or entities

located within the United States who, from July 11, 2004

through March 31, 2008 . . . had an AdWords account with

Google and were charged for clicks on advertisements

appearing on parked domain and/or error page websites,”

3 All section references hereafter refer to the California Business and

Professions Code.

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PULASKI & MIDDLEMAN V. GOOGLE 7

with exclusions.4 Pulaski, on behalf of the putative class,

seeks restitution of moneys Google wrongfully obtained from

the putative class.

Pulaski moved for class certification pursuant to Rule 23

of the Federal Rules of Civil Procedure (“Rule 23”) for a

Rule 23(b)(3) class. Pulaski proposed three different methods

for calculating restitution, all of which were based on a “but

for” or “out-of-pocket loss” calculation: the difference

between what advertisers actually paid and what they would

have paid had Google informed them that their ads were

being placed on parked domains and error pages. The first

approach is based on Google’s Smart Pricing formula as

described above. The amount of restitution owed a class

member would be the difference between the amount the

advertiser actually paid and the amount paid reduced by the

Smart Pricing discount ratio. The second method is the

Content Pricing approach,5 which factors in the lower bidding

that would have occurred had advertisers been allowed to bid

separately on parked domains and error pages. Search Feed

clicks were priced higher than Content Network clicks, which

in turn were considered more desirable than parked domains

and error pages. Accordingly, where the same ad appeared

both in the Search Feed and on Content Network websites,

those Content Network ad prices could serve as a

conservative but-for price for Search Feed clicks on parked

domains and error pages. The third method is the Full

4 Beginning in March 2008, the AdWords interface allowed advertisers

to exclude parked domain and error pages from the set of websites on

which their ads could appear.

5 This method focuses on clicks on parked domains and error pages in

Google’s Search Feed, not on Content Network websites.

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8 PULASKI & MIDDLEMAN V. GOOGLE

Refund approach, in which advertisers would receive full

refunds for clicks on ads placed on parked domains and error

pages. Because some methods may work better than others

for certain subsets of class members, Pulaski presented these

methods as possibly complementary.

In ruling on the class certification motion, the district

court initially found that the proposed class satisfied all of the

criteria under Rule 23(a): numerosity, commonality,

typicality, and adequate representation. The court next turned

to the predominance inquiry under Rule 23(b)(3). On that

issue, it found that, even assuming the plaintiff class could

prevail on liability, common questions did not predominate

on the issues of entitlement to restitution and amount of

restitution due each class member.

First, the court expressed concern that individual

questions may arise in ascertaining entitlement to restitution. 

It observed that “the question of which advertisers among the

hundreds of thousands of proposed class members are even

entitled to restitution would require individual inquiries.” In

particular, the court was concerned with how to

“systematic[ally] . . . identify and exclude from Plaintiffs’

proposed class the many advertisers who have no legal claim

to restitution because they derived direct economic benefits

from ads placed on parked domains and error pages.”

Second, the court identified individual questions that

would arise in determining the amount of restitution owed to

the class and individual class members. The court explained

that our decision in Yokoyama, which held that damages

calculations alone cannot defeat class certification, did not

control the outcome of this issue because Yokoyama cited to

decisions that mentioned a “workable method for calculating

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PULASKI & MIDDLEMAN V. GOOGLE 9

monetary recovery.” Here, the court held that the plaintiffs

had not proposed a method that was workable. The court

explained that different costs for each advertiser, each ad, and

each click, overlaid with an auction process, make it “more

difficult to calculate what AdWords customers would have

paid ‘but for’ the alleged misstatements or omissions.” It

concluded that Pulaski’s proposed methods were insufficient

to account for all of the intricacies involved, including

benefits received from parked domain and error pages.

Concluding that individual questions predominated on the

issue of restitution, the court denied Pulaski’s motion for

class certification without addressing whether class treatment

was a superior method for resolving the dispute as required

by Rule 23(b)(3). Thereafter, Pulaski filed a motion for

reconsideration, which the district court denied.

We granted permission to appeal the order denying class

action certification as authorized by Rule 23(e). We have

jurisdiction under 28 U.S.C. § 1292(e).

II. Standard of Review

A district court’s class certification ruling is reviewed for

abuse of discretion. See Parra v. Bashas’, Inc., 536 F.3d 975,

977 (9th Cir. 2008). “A district court would necessarily

abuse its discretion if it based its ruling on an erroneous view

of the law or a clearly erroneous assessment of the evidence.” 

United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir. 2009)

(en banc) (quoting Cooter & Gell v. Hartmarx Corp.,

496 U.S. 384, 405 (1990)). “[W]hen an appellant raises the

argument that the district court premised a class certification

determination on an error of law, our first task is to evaluate

whether such legal error occurred.” Yokoyama, 594 F.3d at

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10 PULASKI & MIDDLEMAN V. GOOGLE

1091. “If the district court’s determination was premised on

a legal error, we will find a per se abuse of discretion.” Id.

Otherwise, “we will proceed to review the district court’s

class certification decision for abuse of discretion as we have

always done.” Id.

III. Discussion

To obtain certification, a putative class must satisfy four

prerequisites:

(1) the class is so numerous that joinder of all

members is impracticable; (2) there are

questions of law or fact common to the class;

(3) the claims or defenses of the

representative parties are typical of the claims

or defenses of the class; and (4) the

representative parties will fairly and

adequately protect the interests of the class.

Rule 23(a). Additionally, the proposed class must qualify as

one of the types of class actions identified in Rule 23(b). 

Here, Pulaski sought to certify a class under Rule 23(b)(3). 

Under Rule 23(b)(3), the court must find that “questions of

law or fact common to class members predominate over any

questions affecting only individual members,” and that a class

action is “superior to other available methods for fairly and

efficiently adjudicating the controversy.”

Pulaski must “affirmatively demonstrate . . . compliance

with the Rule.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.

2541, 2551 (2011). The question of certification requires a

“rigorous analysis.” Id. Courts may have to “probe behind

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PULASKI & MIDDLEMAN V. GOOGLE 11

the pleadings before coming to rest on the certification

question.” Id.

The district court denied certification because it found

that the putative class did not meet the predominance

requirement. It explained that questions regarding which

advertisers are entitled to restitution in the first instance, and

the amount of restitution owed to each advertiser, both defeat

predominance. We disagree.

A.

Entitlement to restitution is a separate inquiry from the

amount of restitution owed under California’s UCL and FAL. 

To the extent that the district court rested its holding that

common questions do not predominate on the putative class’s

entitlement to restitution, it committed legal error.

The UCL prohibits “any unlawful, unfair, or fraudulent

business act or practice.” § 17200. The FAL prohibits

“untrue or misleading” statements in the course of business. 

§ 17500. This language is “broad” and “sweeping” to

“protect both consumers and competitors by promoting fair

competition in commercial markets for goods and services.” 

Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 320 (2011).

To state a claim under the UCL or the FAL “based on

false advertising or promotional practices, it is necessaryonly

to show that members of the public are likely to be deceived.” 

In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009);6see also

6 Since the passage of California’s Proposition 64 in 2004, private suits

must also allege standing under the UCL and FAL, i.e., that the plaintiff

“suffered injury in fact” and “lost money or property as a result of unfair

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12 PULASKI & MIDDLEMAN V. GOOGLE

Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1020 (9th Cir.

2011) (holding that a district court erred in denying class

certification by requiring individualized proof of reliance and

causation, and remanding in light of In re Tobacco II Cases),

cert. denied, 132 S. Ct. 1970 (2012). This inquiry does not

require “individualized proof of deception, reliance and

injury.” In re Tobacco II Cases, 46 Cal. 4th at 320; Stearns,

655 F.3d at 1020 (same). “[I]n effect, California has created

what amounts to a conclusive presumption that when a

defendant puts out tainted bait and a person sees it and bites,

the defendant has caused an injury; restitution is the remedy.” 

Stearns, 655 F.3d at 1021 n. 13.7

competition.” Kwikset, 51 Cal. 4th at 320–21 (noting that the proposition

“curtailed the universe of those who may enforce” the UCL and FAL,

although the laws’ “substantive reach . . . remains expansive”). There is

a two-part test for standing under the UCL and FAL: the person must

“(1) establish a loss or deprivation of money or property sufficient to

qualify as an injury in fact, i.e., economic injury, and (2) show that that

economic injury was the result of, i.e., caused by, the unfair business

practice or false advertising that is the gravamen of the claim.” Id. at 322. 

Here, the district court determined that one ofthe class representatives had

standing to sue, and that the class representative’s standing satisfied the

standing requirements for the putative class as a whole. Neither party

challenges the district court’s ruling on statutory standing. We therefore

do not address it.

7

Stearns, which was decided before the district court’s ruling here, also

noted that predominance may not exist in a UCL case in which different

members of the class were “exposed to quite disparate information from

various representatives of the defendant.” 655 F.3d at 1020. We have

elaborated on this concept in two cases that post-date the district court’s

order. See Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 596 (9th

Cir. 2012) (holding that common questions did not predominate where

disparate information exposure undercut presumption ofreliance); Berger

v. Home Depot USA, Inc., 741 F.3d 1061, 1069 (9th Cir. 2014) (holding

that predominance did not exist for a putative UCL class whose members

had each been exposed to one of five different contracts, each of which

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PULASKI & MIDDLEMAN V. GOOGLE 13

Under the UCL:

Any person who engages, has engaged, or

proposes to engage in unfair competition may

be enjoined in any court of competent

jurisdiction. The court may make such orders

or judgments, including the appointment of a

receiver, as may be necessary to prevent the

use or employment by any person of any

practice which constitutes unfair competition,

as defined in this chapter, or as may be

necessary to restore to any person in interest

any money or property, real or personal,

which may have been acquired by means of

such unfair competition.

§ 17203. This language, as well as “nearly identical”

language under the FAL, see § 17535, grants a court

discretion to order restitution. Cortez v. Purolator Air

Filtration Prods. Co., 23 Cal. 4th 163, 173 (2000).

may or may not have alerted customers that a damage waiver was an

optional purchase). Google argues that the facts here present an example

of disparate exposure under this line of cases. Pulaski responds that

Google’s deception was pervasive: all AdWords customers could select

Search Feed pages, Content Network pages, or both; parked domain and

error pages were never mentioned in AdWords’s sign-up materials;

Google’s contracts with advertisers never disclosed that Google would

place their ads on parked domains and error pages, regardless of whether

they chose Search Feed pages, Content Network pages, or both; and

Google’s materials answering frequently asked questions did not disclose

ad placement on parked domain and error pages. Because Pulaski’s claim

rests on allegations of deception through omission and falsehoods via the

AdWords sign-up materials, all of which were presented to putative class

members through the same online portal, Google’s argument that disparate

information defeats predominance is unpersuasive.

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14 PULASKI & MIDDLEMAN V. GOOGLE

Thus, a court need not make individual determinations

regarding entitlement to restitution. Instead, restitution is

available on a classwide basis once the class representative

makes the threshold showing of liability under the UCL and

FAL. Accordingly, the district court erred in holding that

such individual questions would predominate.

B.

We held in Yokoyama that “damage calculations alone

cannot defeat certification.” 594 F.3d at 1094. By

concluding that it was not bound by Yokoyama under the

circumstances presented in this case, the district court erred.

Yokoyama concerned theHawaiiDeceptive Practices Act,

Haw. Rev. Stat § 480–2. We concluded that the district court

erred when it held that this law required individualized

showings of reliance because Hawaii courts’ caselaw

“look[ed] to a reasonable consumer, not the particular

consumer.” Id. at 1092. As we noted, the case, at the liability

stage, would “not require the fact-finder to parse what oral

representations each broker made to each plaintiff.” Id. at

1093. Rather, the liability portion would be uniform, as it

“will focus on the standardized written material given to all

plaintiffs to determine whether those materials are likely to

mislead consumers acting reasonably under the

circumstances.” Id. Because it committed legal error, its

denial of class certification was a “[p]er [s]e [a]buse of

[d]iscretion.” Id.

The district court in Yokoyama also erroneously

concluded that the “damages calculation involved highly

individualized and fact-specific determinations,” a conclusion

to which the district court’s premise of subjective reliance

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PULASKI & MIDDLEMAN V. GOOGLE 15

may have contributed. Id. In examining predominance for

class certification purposes, the district court had considered

factors such as:

the financial circumstances and objectives of

each class member; their ages; the [indexed

annuity product (“IAP”)] selected; any

changes in the fixed interest rate for that

particular IAP; the performance of the

selected index; any changes in the index

margin for that particular IAP; any cap on the

indexed interest; the length of the surrender

periods; whether the individual had

undertaken or wanted to undertake an early

withdrawal of funds; any benefit the

individual policy holder derived from the

form of the annuity itself, including the taxdeferral of credited interest; and the actual

rate of return on the IAP.

Id. at 1093–94. We held that, even though all these variables

impacted damages calculations, the individualized

calculations did not defeat predominance. Id. at 1093; see

also Stearns, 655 F.3d at 1026 (“We have held that the mere

fact that there might be differences in damage calculations is

not sufficient to defeat class certification.” (citing

Yokoyama)).

Google argues that Comcast Corp. v. Behrend, — U.S.

—, 133 S. Ct. 1426 (2013), called Yokoyama’s holding into

question. There, in analyzing a putative antitrust class, the

Court held that the plaintiffs’ proposed damages model fell

“far short of establishing that damages are capable of

measurement on a classwide basis.” Id. at 1433. The district

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16 PULASKI & MIDDLEMAN V. GOOGLE

and circuit courts had failed to inquire into whether the model

translated the “legal theory of the harmful event into an

analysis of the economic impact of that event.” Id. at 1435

(emphasis omitted). The Court reasoned that “a model

purporting to serve as evidence of damages in [a] class action

must measure only those damages attributable to that theory. 

If the model does not even attempt to do that, it cannot

possibly establish that damages are susceptible of

measurement across the entire class for purposes of Rule

23(b)(3).” Id. at 1433. In such a situation, “[q]uestions of

individual damage calculations will inevitably overwhelm

questions common to the class.” Id.

Since Comcast, we have continued to apply Yokoyama’s

central holding. In Levya v. Medline Industries, Inc., we

reaffirmed that damage calculations alone cannot defeat class

certification. 716 F.3d 510, 513–14 (9th Cir. 2013) (citing

Yokoyama). We explained that Comcast stood for the

proposition that “plaintiffs must be able to show that their

damages stemmed from the defendant’s actions that created

the legal liability.” Id. at 514; see also Roach v. T.L. Cannon

Corp., 778 F.3d 401, 407 (2d Cir. 2015) (“Comcast held that

a model for determining classwide damages relied upon to

certify a class under Rule 23(b)(3) must actually measure

damages that result from the class’s asserted theory of injury;

but the Court did not hold that proponents of class

certification must rely upon a classwide damages model to

demonstrate predominance.”). The putative class’s problem

in Comcast was that the damages model “did not isolate

damages resulting from any one theory of antitrust impact.” 

Levya, 715 F.3d at 514 (quoting Comcast, 133 S. Ct at 1431). 

Following this discussion, we reversed a denial of class

certification in part because the “damages could feasibly and

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PULASKI & MIDDLEMAN V. GOOGLE 17

efficiently be calculated once the common liability questions

are adjudicated.” Id.

We reaffirmed the proposition that differences in damage

calculations do not defeat class certification after Comcast in

Jimenez v. Allstate Insurance Co., 765 F.3d 1161, 1167 (9th

Cir. 2014) (quoting Levya, including the portion quoting

Yokoyama). As we explained, our sister circuits have adopted

“[s]imilar positions” since Comcast. See id. at 1167–68

(citing cases from the Sixth, Seventh, and Fifth Circuits); see

also Roach, 778 F.3d at 407–08 (citing cases from the First,

Tenth, Fifth, Seventh, and Sixth Circuits, as well as Levya

and Yokoyama, to support the proposition that Comcast did

not hold that Rule 23(b)(3) requires a classwide basis for

damages calculation).

In sum, Yokoyama remains the law of this court, even

after Comcast. Because “[d]amages calculations alone . . .

cannot defeat certification” under Yokoyama, the district court

erred in concluding that Yokoyama “does not apply to the

facts here.” Thus, it abused its discretion in denying class

certification on this basis. See Yokoyama, 594 F.3d at

1090–92.8

8 Google also argues that the Supreme Court’s decision in Dukes bars

class certification here because, under Dukes, certification is inappropriate

based on a lone common question. However, this argument is contrary to

Dukes, which stated that “for the purposes of Rule 23(a)(2), even a single

common question will do.” 131 S. Ct. at 2556. Further, the plaintiffs in

Dukes were pursuing a Rule 23(b)(2) class, rather than a (b)(3) class. Id.

at 2548–49. As the Court made clear, it did not analyze Rule 23(b)(3). Id.

at 2549 n.2.

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18 PULASKI & MIDDLEMAN V. GOOGLE

C.

Google argues that the district court properly denied

Pulaski’s motion for certification under Comcast because the

proposed method for calculating restitution was “arbitrary,”

and thus does not satisfy Rule 23(b)(3)’s predominance

requirement. See Comcast, 133 S. Ct. at 1433. We disagree.

Restitution is “the return of the excess of what the

plaintiff gave the defendant over the value of what the

plaintiff received.” Cortez, 23 Cal. 4th at 174. Restitution

has two purposes: “to restore the defrauded party to the

position he would have had absent the fraud,” and “to deny

the fraudulent party any benefits, whether or not

for[e]seeable, which derive from his wrongful act.” Nelson

v. Serwold, 687 F.2d 278, 281 (9th Cir. 1982) (citing the

Restatement of Restitution).

Restitution under the UCL and FAL “must be of a

measurable amount to restore to the plaintiff what has been

acquired by violations of the statutes, and that measurable

amount must be supported by evidence.” Colgan v.

Leatherman Tool Grp., Inc., 135 Cal. App. 4th 663, 698

(2006). Where a defendant has wrongfully obtained a

plaintiff’s property, “the measure of recovery for the benefit

received . . . is the value of the property at the time of its

improper acquisition . . . or a higher value if this is required

to avoid injustice” where the property has changed in value. 

Id. at 698–99 (quoting the Restatement of Restitution). 

Where plaintiffs are “deceived by misrepresentations into

making a purchase, the economic harm is the same: the

consumer has purchased a product that he or she paid more

for than he or she otherwise might have been willing to pay

if the product had been labeled accurately.” Kwikset, 51 Cal.

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PULASKI & MIDDLEMAN V. GOOGLE 19

4th at 329 (emphasis in original). As the California Supreme

Court explained while discussing economic harm in the

context of standing, this measure “is the same whether or not

a court might objectively view the products as functionally

equivalent”:

Two wines might to almost any palate taste

indistinguishable–but to serious oenophiles,

the difference between one year and the next,

between grapes from one valley and another

nearby, might be sufficient to carry with it

real economic differences in how much they

would pay. Nonkosher meat might taste and

in every respect be nutritionally identical to

kosher meat, but to an observant Jew who

keeps kosher, the former would be worthless.

Id. at 329–30. Applying these concepts to other forms of

fraudulent omission, UCL and FAL restitution is based on

what a purchaser would have paid at the time of purchase had

the purchaser received all the information.

In calculating damages, here restitution, California law

“requires only that some reasonable basis of computation of

damages be used, and the damages may be computed even if

the result reached is an approximation.” Marsu, B.V. v. Walt

Disney Co., 185 F.3d 932, 938–39 (9th Cir. 1999). “[T]he

fact that the amount of damage may not be susceptible of

exact proof or may be uncertain, contingent or difficult of

ascertainment does not bar recovery.” Id. at 939.

We conclude that Pulaski’s proposed method was not

“arbitrary,” as Google argues. The calculation need not

account for benefits received after purchase because the focus

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20 PULASKI & MIDDLEMAN V. GOOGLE

is on the value of the service at the time of purchase. Instead,

in calculating restitution under the UCL and FAL, the focus

is on the difference between what was paid and what a

reasonable consumer would have paid at the time of purchase

without the fraudulent or omitted information. See Kwikset,

51 Cal. 4th at 329.

Here, the harm alleged is Google’s placement of ads on

lower-quality web pages without the advertisers’ knowledge. 

Pulaski’s principal method for calculating restitution employs

Google’s Smart Pricing ratio, which directly addresses

Google’s alleged unfair practice by setting advertisers’ bids

to the levels a rational advertiser would have bid if it had

access to all of Google’s data about how ads perform on

different websites. Because restitution under the UCL and

FAL measures what the advertiser would have paid at the

outset, rather than accounting for what occurred after the

purchase, using a ratio from Google’s data that adjusts for

web page quality is both targeted to remedying the alleged

harm and does not turn on individual circumstances. Thus,

the Smart Pricing method measures the monetary loss

“resulting from the particular . . . injury” alleged. See

Comcast, 133 S. Ct. at 1434.9

IV. Conclusion

The district court erred by conflating restitution

calculation with the liability inquiry for UCL and FAL

claims, and by failing to follow our rule in Yokoyama. 

9 Although we do not directly analyze the Content Pricing or the Full

Refund approaches, those methods may also be appropriate for calculating

restitution. We express no opinion on the merits of any of the proposed

methods.

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PULASKI & MIDDLEMAN V. GOOGLE 21

Further, the proposed method for calculating restitution was

not “arbitrary” under Comcast.

REVERSED and REMANDED.

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