889 F. Supp. 2d 1182
N.D. Cal.2012Background
- Google AdWords and AdSense operate with advertisers paying per click; AdSense publishers may share revenue.
- The AdWords Agreement is the controlling contract, claiming it constitutes the entire agreement and disclaims other terms.
- Smart Pricing is an automatic discount mechanism allegedly not applied to some clicks; plaintiff asserts it should apply to Display Network clicks.
- Plaintiff alleges non-compliant sites and preferential Partner deals violate AdSense Policies and contract terms.
- Location targeting explains advertisers could limit ad geography, but Woods alleges ads were shown outside designated areas.
- Woods filed a FAC alleging eight counts across contract, implied covenant, UCL, and FAL; court previously dismissed some claims and granted leave to amend.
- Court grants in part and denies in part Google’s motion to dismiss, with amendment allowed for certain counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Smart Pricing contract interpretation | Woods contends §7 requires Smart Pricing to be used in pricing. | Google argues no Smart Pricing obligation; terms do not require it for all clicks. | Affirmative; extrinsic evidence shows ambiguity but claim dismissed with leave to amend. |
| Non-Compliant Sites contract interpretation | Section 1/2 requires AdSense compliance by Google publishers. | No guarantee of placement; AdWords disclaims placement obligations. | Dismissed with leave to amend for Count 5. |
| Breach of the implied covenant | Google deprived Woods of contract benefits by not enforcing AdSense or applying Smart Pricing. | No contractual obligation to enforce AdSense or ensure Smart Pricing. | Dismissed with leave to amend. |
| UCL and FAL standing and misrepresentation claims | Woods personally relied on misrepresentations about Smart Pricing and location targeting. | Reliance should be barred by no-reliance clause and sophistication; standing questioned. | UCL fraudulent claim sustained for location targeting; unlawful/unfair/standing issues limited; FAL claims dismissed with leave to amend. |
| Location targeting misrepresentation (UCL) | Ads were supposedly targeted within designated locations but shown elsewhere. | Denied for count 9; plausibly deceptive at pleading stage; standing adequate. |
Key Cases Cited
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (unlawful prong borrows from other laws)
- Miller v. Glenn Miller Prods., Inc., 454 F.3d 975 (9th Cir. 2006) (contract interpretation context)
- Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005 (9th Cir. 2012) (extrinsic evidence and ambiguity on contract terms)
- In re Tobacco II Cases, 46 Cal.4th 298 (Cal. 2009) (standing and reliance for UCL misrepresentation)
- Guido v. Koopman, 1 Cal.App.4th 837 (Cal. App. 1991) (reasonableness of reliance on contractual disclosures)
- Degelman v. Advanced Medical Optics, Inc., 659 F.3d 835 (9th Cir. 2011) (standing showing injury under UCL)