Marketers Ask 9th Circuit To Revive Class-Action Against Facebook

by Wendy Davis, Mar 5, 2013, 5:46 PM

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Two pay-per-click marketers have asked a federal appellate court to allow them to proceed with a class-action lawsuit against the social networking service.

The companies -- Fox Test Prep and Steven Price, who operates the car site DriveDownPrices.com -- say that Facebook violated its contract with pay-per-click marketers by charging them for invalid clicks.

Last year, U.S. District Court Judge Phyllis Hamilton in the Northern District of California ruled that the marketers couldn't bring the lawsuit as a class-action. Her ruling still allows companies to proceed individually, but doing so is often  prohibitively expensive.

The marketers are now asking the 9th Circuit to reverse Hamilton's ruling. Fox Test and Price say that the lawsuit raises questions that are common to all of Facebook's pay-per-click marketers, and therefore should be certified as a class-action.

"Whether Facebook breached the uniform contract here is the common, indeed the predominant, issue that will be determined by the same proof for plaintiffs and all proposed class members," they argue in papers made available late last week.

The case dates to 2009, when Price, Fox Test and other pay-per-click marketers sued the social networking service for allegedly charging them for invalid clicks. Three years ago, U.S. District Court Judge Jeremy Fogel in San Jose, Calif., ruled that Facebook's contract with marketers disclaimed liability for clicks that were "fraudulent" in the sense that the clicker had dubious intentions. But Fogel ruled that the disclaimer didn't apply to clicks that were "invalid" -- such as when technical problems prevented users from reaching a landing page.

In denying the motion for class certification, Hamilton ruled that the marketers hadn't shown there was a uniform method for determining which clicks were invalid.

The marketers now argue that conclusion was wrong. "Because Facebook's rules for distinguishing between valid and invalid clicks are based on uniform, automated computer algorithms, plaintiffs' claims do not require resolution of Facebook's culpability on a plaintiff-by-plaintiff basis," the marketers say in their brief. "Whether plaintiffs win or lose, their claims will rise and fall together."

Federal appellate courts don't appear to have previously ruled on whether pay-per-click marketers can bring class-actions stemming from alleged overcharging. Trial judges have confronted that question, but have reached different conclusions.

In 2012, U.S. District Court Judge Edward Davila in the Northern District of California ruled that search marketers that sued Google about ads on parked domains and error pages -- which people tend to visit after mistyping a URL -- were not entitled to class-action status.

But in 2009, U.S. District Court Judge Christina Snyder in the Central District of California allowed pay-per-click marketers to proceed in a click fraud lawsuit against IAC's Citysearch. That case ultimately was settled, according to court records.

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