Court Opinion

ID: 2961257
Source: CourtListenerOpinion
Date Created: 2015-09-21 17:01:12.593724+00
Date Added: 2024-06-11T15:26:44.243982
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 PULASKI & MIDDLEMAN, LLC; JIT                         No. 12-16752
 PACKAGING, INC.; RK WEST, INC.;
 RICHARD OESTERLING,                                     D.C. No.
               Plaintiffs-Appellants,                 5:08-cv-03369-
                                                           EJD
                       v.

 GOOGLE, INC., a Delaware                                OPINION
 corporation,
                 Defendant-Appellee.

         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.
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.
             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, Cooley LLP, San Diego, California, for Defendant-
Appellee.

                            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”)1 brought 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.
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
intermediary between 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.
              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.”
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.
             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.
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
            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
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
              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 necessary only
to show that members of the public are likely to be deceived.”
In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009);6 see 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
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 of the 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 of reliance); 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
              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.
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 the Hawaii Deceptive 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
            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 tax-
       deferral 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
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
               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.
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.
            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
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.
           PULASKI & MIDDLEMAN V. GOOGLE                 21

Further, the proposed method for calculating restitution was
not “arbitrary” under Comcast.

   REVERSED and REMANDED.