F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

P U L A S K I & M I D D L E M

A N , L L C; J I T P A C K A G I N G , I N C .; RK W E S T , I

N C .; R I C H A R D O E S T E R

L I N G , Plaintiffs-Appellants

,

v

.

G O O G L E , I

N C ., a Delaware corporation, Defendant-Appellee

. N o. 12-16752

D.C. No. 5:08-cv-03369- EJ D

OPI NI ON

A ppeal from the United States District Court for the Northern District of California Edward J . Davila, District J udg e, Presiding

Arg ued and Submitted December 9, 2014—San F r ancisco, California

F iled September 21, 2015

B efore: A. W allace Tashima and Richard A. Paez Circuit J udg es and Gordon J . Quist, * Senior District J udg e.

Opinion by J udg e Paez

* T h e Ho n o rab le Go rd o n J

. Q u i st, S en io r D istrict J u d g e f or th e U .S. District C o u rt f

o r th e W estern D istrict o f Mich ig an , sittin g b y d esig n atio n

.P U L A S K I & M I D D L E M

A N V

. G O O G L E 2

SUMMARY * *

Class Action / Restitution

The panel reversed the district court’s d e nial of class certification in an action broug h t by a putative class o f i n ternet advertisers under California’s Unfair Competitio n L aw and F air Advertising L a w, alleg ing that Goog le, I nc. misled them; and remanded for further proceeding s.

The plaintiff a lleg ed that Goog le misled advertisers b y failing to disclose the p lacement of AdW orks ads o n p arked domains and erro r p a g es; and soug ht, on behalf of the putative class, restitution o f m o ney s Goog le wrong f ully obtained from the putative class.

The panel held that the district c ourt erred in deny ing class certification based on its finding that the putative class did not meet the predominance requirement under F e d. R. Civ. P. 23(b)(3). The panel held that the district court e r r e d by conflating restitution c alculation with the liability inquiry for Unfair Competition L aw a nd Fa i r Advertising L aw claim s , a nd by f ailing to follow the r

ule in Y okoyama v

. Midland National Life Insurance Co.
, 594 F .3d 1087, 1094 (9th Cir. 2 0 10) (holding that damag es calculations alone
cannot defeat class certification). The panel further held that the plaintiff’s proposed method for calculati ng restitution was not “arbitrary

” under Comcast Corp. v. Behrend

, 1 33 S. Ct. 1426 (2013).

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.P U L A S K I & M I D D L E M

A N V

. G O O G L E 3

COUNSEL

Miranda P. Kolbe (arg

ued), Robert C. Schubert, and W illem F

. J onckheer, Schubert J onckheer & Kolbe L L P
, S an F rancisco, California, for Plaintiffs-Appellants.

Michael G. Rhodes (arg

ued), W hitty So m v i c hian, and Ky le C. W ong , Cooley L L P, San F rancisco, Califo r n i a ; Heather Meservy
, Cooley L L P, San Dieg o, California, f or D efendantAppellee.

OP INION

PAEZ , Circuit J udg e:

B e tween 2 004 a

nd 2 008, many online internet advertisers used Goog le, I nc.’s ( “Goog le” ) AdW ords p rog ram, an auction-based prog ram throug h which advertisers would bid for Goog le to place their advertisements on websites. Pulaski & Mid d leman, L L C and several other named plaintiffs (“Pulaski ”) 1 b roug ht this p utative c lass action under California’s Unfair Competition and F air Advertising L aws, alleg ing that Goog le misled them as to the ty pes of websites

on which their advertisements could appear. The pu t a t i ve class initially sou gh t injunctive and restitutionary relief. Af ter Goog le chang ed certain features of the AdW o rds
prog r am, Pulaski, upon filing a Third Amended Consolidated Class Action Complaint, abandoned the claim for injunctive

1 Hereaf ter, “ P u lask i” ref

ers co llectiv ely to P u lask i & Mid d lem an , L L C

an d th e o th er n am e d p lain t if f s, J IT P ack ag in g In c., RK W est, In c., an d Rich ard Oesterlin g

.P U L A S K I & M I D D L E M

A N V

. G O O G L E 4

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

of restitution.

Pu l a ski appeals the district c ourt’s denial of class certification. The district c o u rt held that on the claim for restitutio n , common questions d id n ot predominate over questions affecting indivi d u a l class members. I n deny ing certification, the court reasoned that it was n o t bound by our decision in Y

okoyama v. Midland National Life I n s u r a nce Co.
, 594 F .3d 1087, 1 094 (9th Cir. 2010). I t then ex p lained that d etermining which clas s members are e ntitled to restitution and what amount e ach c lass member should receive would require individual inquiries that “permeate the class claims.”

Pulaski arg ues that the district court err e d i n f ailing to follow Y o koyama

. As ex plained below, we ag r ee. W e therefore reverse the denial of class certification and remand for further proceeding s.

I. Background

A.

This case concerns Goog le’s A d W ords prog ram, an auction-based prog ram throug h which Goog le served a s an intermediary b etween website h osts and a dvertisers. Throug h AdW o rds, i n ternet a dvertisers provided advertisements to Goog le an d its third party w ebsite-owner partners. T o participate, advertisers entered Goog le-defined variables into the AdW ords interfa c e on Goog le’s w ebsite, including the

max imum price per ad they would be willing to pay and their overall budg et. They als o selected which Goog le-defined categ ories of websites they wa n t e d to display the ad.P U L A S K I & M I D D L E M

A N V

. G O O G L E 5

Afterwards, using an auction-based alg orithm, AdW or ds determined the online placement a n d p ri c e of the ad. Thus, during the class period, advertisers did not know in advance

ex a c tly where their ads would appear.

Advertisers paid a particular price to Goog le each time an I nternet user “clicked” on their display ed ad. The price of a particular click depended o n several factors: the max imum bids of other AdW ords customers for clicks base d o n the

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

a “Smar t P ricing ” discount applied to the website where the ad had been placed

. G oog le c reated and instituted Smart Pricing

, a n internally -calculated p r i c e adjustment, to adjust the advertiser’s bids to the same l ev e ls that a “rational advertiser” would bid if the rational a dvertiser had sufficient data about the performance of ads o n each website. Smart Pricing is a ratio calculated b y dividing the c on v ersion rate 2 for the lower-quality website by the c onversion rate f o r t h e same ad on g o og le.com.

There are several categ ories of websites in play

. During the class period, an advertiser using AdW ords could request that its ads appear on Search F eed sites, Content Network sites, or both. Search F eed sites display AdW ords ads along with search r esults after a u ser searches for information using

a p a r t i c ular search term. After entering a particular term, a

user would be p resented with both o rdinary search results a nd ads related to the search term. Content Network websites, on the other hand, are full content sites, like ny times.com, that

2 Usin g Go o g le’ s term in o lo g y , a “c o n v e r s i o n ” o ccu rs w h en a “ click ” lead s to a p articu lar b u s in ess resu lt d ef in ed by th e ad v ertiser, l i k e a p u rch ase o r a sig n -u p

. A co n v ersio n rate is th e “ n u m b er o f co n v ersio n s d iv id ed b y

th e n u m b er o f ad click s o v er a d ef

in ed p erio d o f

tim e.”P U L A S K I & M I D D L E M

A N V

. G O O G L E 6

publish i n formation independent of search results. Ads would appear on these sites if the a d ’s key w o r d s matched those of the website.

T h er e a re other categ ories of sites that did not appe ar i n the AdW ords r eg istration p rocess: parked domains and error pag es. Parked domain p ag e s are undeveloped domains whose
pag es ap p ea r w hen users ty pe g eneric terms into a web browser. T h e s e a

re p ag es of ads without content. Error
pag es appear when a person inputs a n unreg istered web address, or something other than a web address, into a web browser ’ s a ddress bar. Ty ping this information into an address bar used t o r e s u l t in error messag es, but during the class period inputting this information resulted in error pag e s that offered ads. Even thoug h only Search F eed and Content Network websites w ere listed i n the AdW ords reg istration
process, AdW ords a ds appeared on both parked domains a nd
error pag es.

B.

Pulaski alleg es that Goog le misled advert isers, violating Califor n i a ’s Unfair Competition L aw (“UCL ”), Cal B us. & Prof. Code § 17200 et seq ., 3 and California’s F air Advertising L aw ( “ F AL ”), § 17500 et seq ., b y failing to disclose the placement of AdW ords ads on parked d o mains and error pag es. The putative class consists o f “[ a] ll persons or entities located w ithin the United States who, from J uly 11, 2004 throug h March 3 1
, 2 008

. . . had an AdW ords account with Goog le and were charg ed for clicks on advertisements appearing on parked domain and/or error pag e we b sites,”

3 A ll sectio n ref

eren ces h ereaf

ter ref er to th e Calif

o rn ia B u sin ess an d P ro f essio n s Co d e.P U L A S K I & M I D D L E M

A N V

. G O O G L E 7

with ex clusions. 4 Pulaski, on behalf o f the putative c lass, seeks restitution of money s Goog le wrong fully obtained from the putative class.

Pulaski moved for class c ertification pursuant to Rule 23 of the F ederal Rules of C i v i l P r o cedure (“Rule 2 3”) for a Rule 23(b)(3) c lass. Pulaski proposed three di f ferent methods for calculating restitution, all of which were based on a “but for” o r “ o ut-of-pocket loss” c a lculation: the difference between what advertisers actually paid and what they would have paid had Goog le informed them that their ads were being p laced on parked domains and e r ror pag es

. T he first
appro a c h i s based on Goog le’s Smart Pricing formula a s described above. The am o u n t of restitution o w ed a class member would b e the d ifference between the amount the advertiser a ctually paid a

nd the amount paid r educe d b y t he Smart Pricing discount ratio. The second method is the Content Pricing approach, 5 which factors in the lower bidding that w ould have o ccurred had advertisers been allowed to bid separately on parked domains a n d error p ag es. Search F eed clicks were priced hig her than Content Network clicks, which in turn were considered more desirable than parked domains and error p ag es. According ly

, where the s a m e a d a ppeared both in the Search F e ed and on Content Network w ebsites, those Content Network a d prices could serve as a conservative but-for p r i ce for Search F e ed clicks on p arked d o m a ins and error p ag e s. The third method is the Fu l l

4 Beg in n in g in March 2 0 0 8
, th e A d Wo rd s in terf ace allo w ed ad v ertisers
to e x c l u d e p ark ed d o m ain an d erro r p ag es f ro m th e set o f w eb sites on

w h ich th eir ad s co u l d ap p ear.

5 T h is m eth od f

o cu ses o n click s o n p ark ed do m ain s an d erro r p ag es in Go o g le’ s Search Feed , n o t o n Co n ten t Netw o rk

w eb sites.P U L A S K I & M I D D L E M

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. G O O G L E 8

Refund approach, in w hich advertisers wou l d r eceive full refunds for clicks on a d s placed on parked domains a nd error pag es. B ecause some methods may work better th a n o t h e rs for certain subsets of class members, Pulaski presented these methods as possibly

complementary

.

I n ruling on the class cer t i f ication motion, the district
court initially f

ound that the proposed c lass satisfied all of the criteria under Rule 23(a): numerosity

, commona l ity

, ty picality

, a nd adequate representation. T he court n ex t turned
to the predominance inquiry un d e r R u le 23(b)(3). On that issue, it found that, even a ssuming the pl a i n t i f f class could prevail on liability

, common q uestions did no t predominate

on the issues of entitlement to r e s t i t u t ion and amount o f restitution due each class member.

F irst, the court ex pressed concern that individual questions may arise in ascertaining entitlement to restitution. I t observed that “the question of which advertisers among the hundreds o f thousands of proposed class me mbers are even entitled to restitution would require individual inquiries.” I n particular, t h e court was concerned with h ow to “sy stematic[ ally ]

. . . id entify and ex clude from Plaintiffs’ proposed class the many advertisers who have no leg al claim
to restitution be c a u s e they derived direct economic benefits from ads placed on parked domains and error pag es.”

Se co n d

, the court identified individual questions that would arise in determining the amount o f restitution owed to the class and individual class members. The court ex p lained that our decision in Y

o k o y a m a , which held that damag e s calculations alone canno t defeat class c ertification, did not control the outcome o f this issue because Y o k oyama cited to decisions that mentioned a “workable method for calculatingP U L A S K I & M I D D L E M

A N V

. G O O G L E 9

monetary recovery .” Here, the court held that the plainti ffs had not prop o s e d a method that was workable. The court

ex p lained that different costs for each advertiser, each ad, a nd each click, overlaid with an auction process, make it “more difficult to calculate what AdW ords customers would h a v e paid ‘but for’ the all e g e d misstatements or omissions.” I t concluded that Pulaski’s proposed methods were insufficient
to account for all of the i n t r i cacies involved, including benefits received from parked domain and error pag es.

Concluding that i n d i v i d

u a l questions predominated o n the issu e o f restitution, the court denied Pulaski’s motion for class certification without addressing whether class treatment

was a superior method for resolving the dispute a s r equired by Rule 23(b)(3). T hereafter, Pulaski filed a motion for reconsideration, which the district court denied.

W e g ranted permission to appeal the order deny ing class action certification as authoriz ed by Ru l e 2 3(e). W e have jurisdiction under 28 U.S.C. § 1292(e).

II. Standard of Review

A district court’s class c ertification ruling is reviewed for abuse o f discretion. See P arra v. Bashas’, Inc.
, 536 F .3d 975, 977 (9th Cir. 2008). “A district court would necessarily abuse its discretion if it based its ruling o n an erroneous view of the law o r a clearly erroneous a ssessment of the evidence.” United States v. Hinkson

, 585 F .3d 1247, 1259 (9th Cir. 2 009) (en banc) (qu o t i n g Cooter & Gell v. Hartmarx Corp.
, 496 U

. S

. 384, 405 (1990)). “[ W ] hen an appellant raises the
arg ument that the district court premised a class c ertification determination on an error of law, our first task is to evaluate whether such leg al error o cc u rred.” Y okoyama

, 594 F .3d atP U L A S K I & M I D D L E M

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. G O O G L E 10

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

a leg al error, we will find a per se abuse of discretion.” Id. O therwise, “we will proceed to review the district cour t ’s class certification decision for abuse of d iscretion as we have alway s done.” Id.

III. Discussion

To obtain c ertification, a putative class must satisfy four prerequisites:

(1) the class is so numerous that joinder of all members is impracticable; (2) there a re questions of law or fact common to the class; ( 3 ) t h e c l a i m s o r d e f e n s e s o f t h e representative parties are ty pical of the claims

or defenses of the class; a n d ( 4) the

r e p r e s e n t a t i v e p a r t i e s w i l l f a i r l y a n d adequately

protect the interests of the class.

Rule 23(a). Additionally

, the p roposed class must qualify a s

one of the ty

pes of class actions identified in Rule 23(b). Here, Pulaski soug ht to cer t i f y a class under Rule 23(b)(3). Under Rule 23(b)(3), the co u r t m u st find that “questions o f law or fact c ommon to class members predominate over any questions affecting only individual members,” and that a class action is “superior to other available methods for fairly a n d efficiently adjudicating the controversy .”

Pulaski must “affirmatively demonstrate . . . compliance with t h e R u l e

. ” W

a l-Mart Stores, I

nc. v

. Dukes

, 131 S. Ct. 2541, 2551 (2011). T h e question of c ertif i c a t i o n requires a

“ r ig orous analy sis.” Id. Courts may have to “probe behindP U L A S K I & M I D D L E M

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. G O O G L E 11

the pleading s before coming to rest on th e c ertification question.” Id.

The district court denied certification because it f ound that the putative class did not me e t the predominance requirement. I t ex plaine d t h a t questions reg arding which advertisers are entitled to restitution in the first instance, a nd the amount of r estitution owed to each advertiser, both defeat predominance. W e disag ree.

A.

Entitlement to restitution is a s e p arate inquiry from the
amount of restitution o wed under California’s UCL and F AL

. To the ex tent that th e d i s t r i ct c ourt r ested its holding that

common q

uestions do not predominate o n the putative class’s entitlement to restitution, it committed leg al error.

The UCL prohibits “ any unlawful, unfair, or fra u d ulent business act o r practice.” § 17200. The F AL p r o h i b its “untrue or misleading ” statements in the course of business. § 17500. This lang u ag e is “ broad” and “swee p i ng ” to “protect both c onsumers and competitors by p r omoting fair competition in commercial markets for g oods and services.” Kwikset Corp. v. Super. Ct. , 51 Cal. 4th 310, 320 (2011).

To state a claim under th e U C L or the F AL “based on false advertising or p romotional p ractices, it is necessary only
to show that members of the p ublic are likely to be deceived.” In re Tobacco II Cases
, 46 Cal. 4th 298, 312 (2009); 6 see also

6 S in ce t h e p assag e o f Calif

orn ia’ s Pro p o s itio n 6 4 in 2 0 0 4
, p riv ate su its

m u st also alleg e s tan d in g u n d er th e UCL an d FA L
, i.e., th at th e p lain tif f

“ s u f f ered in j u ry in f act” an d “ lo st m o n ey o r p ro p erty as a resu lt o f u n f

airP U L A S K I & M I D D L E M

A N V

. G O O G L E 12

Stearns v. Ticketmaster Corp.
, 655 F .3d 1013, 1020 (9th Cir. 2011) (holding that a district cou r t e r r ed in deny ing class certification by requiring individualiz e d proof of reliance a nd causation, and remanding in lig h t o f In re Tobacco II Cases ),

c ert. denied

, 132 S. Ct. 1970 (2012). This inquiry does n o t require “individualiz ed proof of deception, reliance a nd injury .” In re Tobacco II Cases
, 46 Cal. 4th at 320; Stearns
, 655 F

. 3d at 1020 (same). “[ I ] n effect, California h as created what a mounts to a conclusive presumption that when a defendant puts out tainted bait and a person sees it and bites, the defendant h as caused an injury ; restitution is the remedy

. ” Stearns , 655 F .3d at 1021 n. 13. 7

co m petitio n .” K

wikset

, 5 1 Cal. 4th at 3 2 0

– 2 1 (n o tin g th at th e p ro p o sitio n

“ cu rtailed th e u n iv erse o f th ose w h o m ay en f

o rce” th e UCL an d FA L
, alth o u g h th e law s’ “ su

b stan tiv e reach . . . rem ain s ex p an s iv e”). T h ere is

a tw o

- part test f

o r stan d in g u n d er th e UCL an d FA L : th e p e r s o n m ust

“ (1 ) estab lish a lo ss o r d ep riv atio n o f m o n ey o r p ro p erty s u f f icien t to q u alif y as an in j u ry in f act, i.e., eco n o mic i n

ju ry , an d (2 ) sh o w th at th at

eco n o m ic in

j u ry w as th e r e su lt o f

, i.e., ca u sed b

y , th e u n f air b u sin ess p ractice o r f

alse ad v ertisin g th at is t

h e g rav am en o f th e claim .” Id

. at 3 2 2

. Here, th e d istrict co u

rt d eterm in ed th at o n e o f th e class rep resen tativ es h ad
stan d in g to su e, an d th at th e class rep resen ta t i v e ’s stan d in g satisf ied th e stan d in g req u irem en ts f

o r th e p u tativ e class as a w h o l e

. Neith er p arty ch allen g es th e d istrict co u rt’ s ru lin g o n statu to ry stan din g

. W e th eref ore d o n o t ad d ress it.

7 Stea rn s , w

h ich w as d ecid ed b ef

o re th e d istrict co u rt’ s ru lin g h ere, also

n o ted th at p red o m in an ce m ay n o t ex ist in a UCL case in w h ich d if f eren t

m em b ers o f th e class w ere “ ex p osed to q u ite d isp arate in f o rm atio n f

ro m

v ari o u s rep resen tativ es o f th e d ef en dan t.” 6 55 F.3 d at 1 02 0

. W e h av e elab orated o n th is co n cep t in t w o cases th at p o st- d ate th e d istrict co u rt’ s

o rd er. S ee Ma z za v. Am. Ho n d

a Mo to r Co

., In c. , 6 6 6 F.3 d 58 1
, 5 96 (9 th Cir. 2 01 2 ) ( h o l d i n g th at co m m o n q u estio n s d id n o t p red o m in ate w h ere d isp arate in f

o rm atio n ex p o su

re u n d ercu t p resu m

ptio n o f relian ce); Berg er

v. Ho me D ep o t US

A, In c. , 7 4 1 F.3 d 1 0 6 1
, 10 6 9 (9 th C ir. 2 0 1 4 ) (h o ld in g th at pred om in an ce d id n o t ex i st f o r a p u tativ e U CL class w h o se m em

b ers h ad each been ex p o sed to o n e o f f iv e dif f e ren t co n tracts, each o f w h ichP U L A S K I & M I D D L E M

A N V

. G O O G L E 13

Under the UCL :

Any p erson who eng ag e s, has eng ag ed, o r proposes to eng ag e in unfair competition may be enjoined in a ny court of competent jurisdiction. The court may make such orders or judg ments, including the appointment of a receiver, as may be n ecessary to p r e vent the

use o r employ

ment by any p erson of any practice which constitutes unfair competition,

as defined in this chapter, o r as may be
necessary to restore to any p erson in interest
any money o r prop e rt y , real or personal, which may ha v e been acquired by means o f such unfair competition.

§ 17203. This lang u ag e, as well a s “nearly identical” lang uag e u n d er t he F AL
, see § 17535, g rants a court discretion to order restitution. Cort e z v. Purolator Air Filtration Prods. Co. , 23 Cal. 4th 163, 173 (2000).

m ay o r m ay n o t h av e alerted cu sto m ers th a t a d a m ag e w aiv er w as an

o p tio n al pu rch ase). Go o g le arg u es th at th e f acts h ere p resen t an ex am p le

o f d isp arate ex p o s u r e u n d er th is lin e o f cases. P u lask i resp o n d s th at Go o g le’ s d ecep t i o n w a s perv asiv e: all A d W o rd s cu sto m ers co u ld select Search Feed p ag es, Co n ten t Netw o rk p ag es, o r b o th ; p ark ed d om ain an d

e r r o r p ag es w ere n ev er m en tio n ed in A d W o rd s’ s sig n

- u p m aterials ; Go o g le’ s co n tracts w ith ad v ertisers n ev er d i s c lo sed th at Go o g le w ou ld
p lace t h eir ad s on p ark ed d om ain s an d erro r p ag es, reg ard l ess o f w h eth er th ey ch o se Search Feed p ag es, Co n ten t Netw ork p ag es, o r b oth ; an d Go o g le’ s m aterials an sw erin g f req u en tly ask ed qu estio n s d id n o t d isclo s e ad p lacem en t o n p ark ed d om ain an d erro r p ag es. B ecau se P u lask i’ s claim
rests on alleg atio n s o f d ecep tio n th ro u g h om issio n an d f alseh o o ds v ia th e A d Wo rd s sig n

- u

p m aterials, all of w

h ich w ere p resen ted to p u tativ e class

m em b ers th ro u g h th e sam e on lin e p o rtal, Go og le’ s arg u m en t th at d isp arate in f o rm atio n d ef eats p red o m in an ce is u n

p ersu asiv e.P U L A S K I & M I D D L E M

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. G O O G L E 14

T h u s , a court need n ot make individual determinatio n s reg arding entitlement to resti t u t ion. I n stead, restitution is availab l e o n a classwide basis once the class representative makes the threshold showing of liability under the UCL a nd F AL

. According ly

, the di s t rict court erred in holding that such individual questions would predominate.

B.

W e held i n Y

okoyama that “damag e calculations alone
cannot d efeat certification

. ” 5 94 F .3d at 1094. B y

c o ncluding that it was not bound by Y okoyama under t h e circumstances presented in this case, the district court erred.

Y okoyama concerned t

h e H a w a i i Deceptive Practices Act, Haw. Rev. Stat § 480–2. W e concluded that the district court erred when it held that this law required individualiz ed showing s o f r eliance because Hawaii courts’ caselaw “look[ ed] to a reasonable consumer, not the par t i cular consumer.” I

d. at 1092. A s we noted, the case, at the liability stag e, would “not require the f act-finder to parse what oral representations each broker made to each plaintiff.” Id. at 1093. Rather, the liabilit y p ortion would be uniform, a s it “will focus o n the s t a n dardiz ed w ritten material g iven to all plaintiffs to determine whether those materials are likely to

m i s l e a d c o n s u m e r s a c t i n g r e a s o n a b l y u n d e r t h e circumstances.” I

d

. B ecause it committed leg al error, its denial o f class certification w a s a “[ p ] er [ s] e [ a] buse o f [ d] iscretion.” Id.

The district c o urt in Y okoyama also erroneously

c oncluded that the “damag e s calculation involved high l y i n d i v i d u a l i ze d a n d f a c t

- s pecific determinations,” a conclusio n to which the district court’s pr e mise of subjective relianceP U L A S K I & M I D D L E M

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. G O O G L E 15

may have contributed

. Id. I n ex a mining predominance for class certification purposes, the d istrict court had considered factors such as:

the f inancia l circumstances and objectives o f each c lass member; their ag e s ; t he [ index ed

ann uity product (“I AP”)] selected; any chang es in the f

ix ed interest rate for that parti cular I AP; the performance of the selected index ; any c hang e s in t h e index
marg in for that particular I A P; any cap on the index e d interest; the leng th of the s u r r e nder
p e r i o d s ; w h e t h e r t h e i n d i v i d u a l h a d undertaken or wanted to undert a k e an e arly withdrawal of funds; any benefi t the ind i vidual policy h older derived from the form of the annuity itself, including the tax

deferra l of credited interest; and the actual rate of return on the I

AP.

Id. at 1 093–94. W e held that, even thoug h a ll these variables i m p a c t e d d a m a g e s c a l c u l a t i o n s , t h e i n d i v i d u a l i z e d calculations did not defeat pr e dominance. Id. at 1093; see also Stearns
, 655 F .3d at 1026 (“W e have held that the mere fact that there mig ht be differences in d amag e calculations is
not sufficient to d e f

eat class certificati o n

. ” (citing Y o koyama )).

Goog le arg ues that Comcast Corp. v. Behrend

, — U.S.

—, 133 S. Ct. 1426 (2013), called Y okoyama ’s hold i ng into question. There, in analy z ing a putative antitrust class, the Cou r t h eld that the plaintiffs’ proposed damag es model fell “far short of establishing that damag es are capable o f
measurement on a classwide basis.” Id. at 1433. The districtP U L A S K I & M I D D L E M

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. G O O G L E 16

and circuit courts had failed to inquire into whether the model translated the “leg al theory of the harmful event into an analy si s o f t h e economic impact o f that event.” Id. at 1435 (emphasis omitted). The C o u r t reasoned that “a model purporting to serve as evidence of damag es in [ a] c lass action
must measure only those damag es attributable to that theory

. I f t h e m odel does not even attempt to do that, it cannot possibly establish tha t d amag es are susceptible o f

measureme n t a cross the entire class for purposes of Rule 23(b)(3).” Id. at 1 4 3 3. I n such a situation, “[ q] uestions o f individual d ama g e calculations will inevitably overwhelm questions common to the class.” Id.

Since Comcast , we have continued to apply Y okoyama ’s central holding

. I n Levya v. Medline Indus t r i e s , Inc.
, we reaffirmed that damag e calculations alone cannot defeat class certification. 716 F .3d 510, 513–14 (9th Cir. 2013) (cit i ng Y o koyama ). W e ex plained that Comcast stood for the proposition that “plaintiffs must be able to sh o w t h at their damag es stemmed from the d efendant’s ac tions that created the leg a l liability .” Id. at 514; see a lso Roach v. T.L. Cannon Corp.
, 778 F .3d 4 01, 407 (2d Cir. 2015) (“ Comcast held that

a model for determining classwide damag es relied up o n to certify a c lass under Rule 23(b)(3) must ac t u al ly measure damag es that result from the class’s asserted theory of injury ; but the Cour t d i d not hold that proponents o f class certification must rely upon a classwide damage s m o d e l to demonstrate predominance.”). T he putative class’s problem in Comcas t w a s t hat the damag es model “did not isolate damag es r e s u lting from a ny one theory of antitrust impact.” Levya
, 715 F .3d a t 514 (quoting Comcast
, 133 S. Ct at 1431). F ollowing this discuss ion, we reversed a denial of class certification in part because the “damag e s could feasibly a ndP U L A S K I & M I D D L E M

A N V

. G O O G L E 17

efficiently be calculated once the common liability questions are adjudicated.” Id.

W e reaffirmed the proposition that differences in damag e calculations do not defeat c lass certification after Comcast in Jimenez v

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

. 2 0 14) (quoting Levya
, including the portion quoting Y o koyama ). As w e ex plained, o ur sister circuits h ave adopted “[ s] imila r positions” since Comcast

. See id. at 1167–68 (citing cases from the Six th, Seventh, a nd F ifth Circuits); see also Roach

, 778 F .3d at 407–08 (citing cases from the F irst, Tent h

, F ifth, Seventh, and Six th Circuits, as well as Levya and Y o koyama

, to support the pro p o s i t ion that Comcast did
not hold that Rule 23(b)(3) requires a class w i de basis for damag es calculation).

I n sum, Y

okoyama remains the law of this c o u r t , even after Comcast

. B ecause “[ d ]amag es c alculatio n s a lone

. . . cannot defe a

t c e r t i f i c a t i on” under Y

o koyama

, the district court erred in concluding that Y okoyama “ does no t apply to the facts here.” Thus, it abused its discre t i o n in deny ing class

ce r t i f i c ation on this basis. See Y okoyama

, 594 F .3d at 1090–92. 8

8 Go o g le a l s o arg u es th at th e Su p rem e Co u rt’ s d ecisio n i n D u kes b ars class certif

icatio n h ere b ecau se, u n der Du ke s , c ertif icatio n is i n ap p ro p riate b ased o n a lo n e co m

m o n qu estio n

. Ho w ev er, th is arg u m en t is co n trary to Du kes

, w h ich stated th at “ f

or th e p u rp o ses o f Ru le 2 3 (a)(2 ), ev en a sin g le

co m m o n q u estio n w ill d o .” 1 3 1 S. Ct. at 2 5 5 6 . Fu rth er, th e p lain tif f s in Du kes w ere p u

rsu in g a Ru l e 2 3 (b )(2 ) class, rath er th an a (b )(3 ) class. Id

. at 2 5 4 8

– 4 9

. A s th e Co u rt m ad e clear, it d i d n o t an aly ze Ru le 2 3 (b )(3 ). Id

. at 2 5 4 9 n .2

.P U L A S K I & M I D D L E M

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. G O O G L E 18

C.

Goog le arg ues th at t h e district court properly denied Pulaski’s motion for certification under Comcast b e cause the
p r oposed method for c alculating restitution was “arbitrar y , ” and thus d o e s n ot satisfy Rule 23(b)(3)’s predominance requirement. S

ee Comcast
, 1 33 S. Ct. at 1433. W e disag ree.

Resti t u t i o n is “the return of the ex cess of what the plaintiff g ave the defendant over the value of w h at t h e plaintiff r eceived.” Cortez
, 23 Cal. 4 th at 174. Restitution has two purposes: “ t o restore the defrauded p a rty to the position he would h ave had absent the fraud,” a n d “ t o deny the fraudulent pa rty any benefits, whether or not f or[ e] seeable, which derive f rom his wrong ful act.” N e l s o n

v. Serwold

, 687 F .2d 2 78, 281 (9th C i r

. 1982) ( citing the Restatement of Restitution).

R e stitution under the UCL and F AL “must be o f a measurable a mount to restore to the pla i n t i f f w hat has been acquired by violations o f the statut es , a n d that measurable
amount m u s t be supported b y evidence.” Colgan v

. Leatherman Tool G rp., I nc. , 135 Cal. App. 4th 663, 698 (2006). Where a d efendant has wrong fully obtained a plaintiff’s p r operty , “the measure of r ecovery for the benefit

r e ceived

. . . is the value of the p roperty at the time of its improper acquisition

. . . or a h ig her value if t h i s is r equired
to avoid injustice” where the property has chang ed in value. Id. at 698–99 (quoting the Restatement of Restitution). W h ere plaintiffs are “deceived by misrepresentations into mak i n g a purchase, the economic harm is the same: the

consumer has purchased a product that he or she pai d more f o r than he or she otherwise mig ht have been w illing to pay if the product had been labeled accurately .” Kwikset

, 51 Cal.P U L A S K I & M I D D L E M

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. G O O G L E 19

4th at 329 ( emphasis in orig inal). As the California Supreme Court e x plained while discussing economic harm in the
contex t of standing

, this measure “is the same whether or not

a court mig ht objectively vi ew t h e products as functionally equivalent”:

Two w ines mig ht t o a l m ost any palate taste indisting uishable–but to serious oenophiles, the difference between one y ear and the nex t, between g rapes from one v alley a nd another nearby

, mig ht b e sufficient t o c arry with it real economic differences in h ow much they

w o uld pay

. Nonkosher meat mig ht taste a n d in e very respect b e nu t r i tionally identical to kosher m e a t , but to an observant J ew who keeps kosher, the former would be worthless.

Id. at 329–30. Apply ing these concep t s t o o ther forms o f fraudulent omission, U CL and F AL restit u t ion is based on what a purchaser would have paid a t the time of purchase h ad the purchaser received all the information.

I n calculating damag es, here restitution, Californi a l aw “requires only that some reasonable basis of computation o f damag es be u sed, and the damag es may be computed even if the result reached is a

n approx imation.” Marsu, B.V. v. W alt Disney Co.
, 185 F .3d 932, 938–39 (9th Cir. 199 9 )

. “[ T] he fact that t h e a m o u nt of damag e may not be susceptible o f

ex a c t proof o r m a y b e uncertain, conting ent or difficult o f ascertainment does not bar recovery .” Id. at 939.

W e conclude that Pulaski’s propo s e d method was not “arbitrary ,” as Goog le ar gues. The c alculation need not account for benefits received after p urchase because the focusP U L A S K I & M I D D L E M

A N V

. G O O G L E 20

is on the value of the service at the time of purchase. I nstead, in calculating restitution under t h e U CL and F AL
, the focus is on the differ en ce between what w as paid and what a reasonable consumer would h ave paid at the time of purchase without the fraudulent or omitted information. See Kwikset

, 51 Cal. 4th at 329.

Here, the harm alleg ed i s G o o gl e’s p lacement of a ds on lower-quality web pag e s without the advertisers’ knowledg e

. Pulaski’s principal m e t

h o d f or calculating restitution e mploy s Goog le’s Smart Pricing ratio, which directly addresses Goog le’s alleg ed unfair practice by settin g a dvertisers’ bids
to the levels a r a tional a dvertiser would have bid if it h ad

access to all of G o o gl e’s data about how ads perform on different websites. B ecause restitution un d e r the UCL a nd F AL measures what the adver t i s e r would have paid at the outset, rather than accounting f or w hat o c c u r red a fter the purchase, u sing a ratio from Goog le’s data th a t adjusts for web pag e quality is both targ eted to remedy ing the alleg ed harm and does not turn on individual c i r c u m stances. Thus, the Smart Pricing method measures the monetary lo ss “resulting from the particular

. . . i n jury ” alleg ed. See Comcast , 133 S. Ct. at 1434. 9

IV. Conclusion

The dis t r ict court erred b y conflating restitution

ca l c u l a t ion with the liability inquiry for U CL and F AL claims, a n d b y failing to follow our rule in Y okoyama

.

9 A lth o u g h w e d o n o t d irectly an aly ze th e C o n t e n t P ricin g o r th e Fu l l Ref u n d ap p ro ach es, th o se m eth o d s m ay also b e ap p ro p riate f or calcu latin g restitu tio n

. We ex p ress n o o p in io n o n th e m erits o f an y o f th e p ro po s ed

m eth o d s.P U L A S K I & M I D D L E M

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. G O O G L E 21

F urther, the proposed method for calculating restitution was not “arbitrary

” under Comcast

.

REVERSED and REMANDED.