Levitte v. Google Inc.

Filing 77

Defendant Google Inc.'s ANSWER to Amended Complaint, COUNTERCLAIM against JIT Packaging, Inc. byGoogle Inc.. (Norton, Leo) (Filed on 3/4/2010)

Levitte v. Google Inc. Doc. 77 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page1 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO COOLEY GODWARD KRONISH LLP MICHAEL G. RHODES (116127) (rhodesmg@cooley.com) LEO P. NORTON (216282) (lnorton@cooley.com) 4401 Eastgate Mall San Diego, CA 92121-1909 Telephone: (858) 550-6000 Facsimile: (858) 550-6420 COOLEY GODWARD KRONISH LLP PETER J. WILLSEY (admitted pro hac vice) (pwillsey@cooley.com) 777 6th Street, N.W. Washington, D.C. 20001 Telephone: (202) 842-7800 Facsimile: (202) 842-7899 Attorneys for Defendant GOOGLE INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION In re Google AdWords Litigation Case No. 08-cv-03369 JW HRL DEFENDANT GOOGLE INC.'S ANSWER AND COUNTERCLAIM TO AMENDED CONSOLIDATED CLASS ACTION COMPLAINT [FILED PURSUANT TO COURT ORDER DATED 2/17/2010 DOCKET NO. 74] [GOOGLE'S COUNTERCLAIM DISMISSED WITHOUT PREJUDICE BY COURT ORDER DATED 7/16/2009 DOCKET NO. 49] Defendant Google Inc. ("Google") responds to Plaintiffs' Consolidated Class Action Complaint ("Consolidated Complaint") as follows: 1. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Dockets.Justia.com Case5:08-cv-03369-JW Document77 Filed03/04/10 Page2 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO ANSWER SUMMARY OF CLAIMS 1. Google admits that Plaintiffs purport to bring this action on behalf of a putative class of AdWords advertisers and that Plaintiffs purport to assert various claims against Google. Except as expressly admitted herein, Google denies the allegations of paragraph 1 and that this action can be maintained as a class action. 2. Google admits that it offers a free search engine service that is widely recognized as a leading search engine and that its largest revenue source during the relevant time period in terms of dollars was advertising revenue. Google admits that Plaintiffs contracted for and used Google's AdWords advertising program. Google also admits that advertisers may opt, among other billing and payment options, to pay Google based on the number of internet users that click on their ads. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 2, and on that basis, denies them. 3. Google admits that it has at times used language similar to the quoted language in paragraph 3 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 3. 4. 5. 6. Denied. Denied. Denied. PARTIES 7. Google admits that plaintiff Hal K. Levitte contracted for and used Google's AdWords advertising program. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 7, and on that basis, denies them. 2. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page3 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 8. Google admits that plaintiff Pulaski & Middleman, LLC contracted for and used Google's AdWords advertising program. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 8, and on that basis, denies them. 9. Google admits that plaintiff RK West, Inc., d/b/a Malibu Sales contracted for and used Google's AdWords advertising program. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 9, and on that basis, denies them. 10. Google admits that plaintiff JIT Packaging, Inc. contracted for and used Google's AdWords advertising program. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10, and on that basis, denies them. 10A. Google admits that plaintiffs West Coast Cameras, Inc. and Richard Oesterling contracted for and used Google's AdWords advertising program. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 10, and on that basis, denies them. 11. Admitted. JURISDICTION AND VENUE 12. The allegations of paragraph 12 are legal conclusions to which no response is required. To the extent a response is required, Google admits that this Court presently has subject matter jurisdiction over this purported class action. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 12, and on that basis, denies them. 13. The allegations of paragraph 13 are legal conclusions to which no response is required. To the extent a response is required, Google admits that it resides and does business in this judicial district. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 13, and on that basis, denies them. 3. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page4 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO FACTS A. Background and Description of Google's Advertising Programs. 14. Google admits that it offers a free search engine service that is widely recognized as a leading search engine. Google also admits that among other descriptions, it presently describes its Content Network similar to the quote in paragraph 14, but denies that Plaintiffs have put the quote in the proper context or that the description is a complete description of the Content Network. Except as expressly admitted herein, Google denies the allegations of paragraph 14. 15. Google admits that it offers a free search engine service that is widely recognized as a leading search engine, that its revenues in 2007 were approximately $16.6 billion and in 2008 were approximately $21.7 billion, and that its largest revenue source in terms of dollars for those two years was advertising revenue. Except as expressly admitted herein, Google denies the allegations of paragraph 15. 16. Google admits that it offers an advertising program called "AdWords" and that it offers an advertising program called "AdSense." Google further admits that AdWords is for advertisers, while certain aspects of AdSense are for site owners. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 16, and on that basis, denies them. 17. Google admits that at one point in time, among other descriptions, it described the AdWords advertising program similarly to the blocked-quote in paragraph 17, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 17. 18. Google admits that under the Google AdWords advertising program, advertisers may select and bid on particular keywords. Google further admits that when an internet user employs Google to search for selected terms, Google may display advertisers' ads on the Google webpage that returns the search results. Google further admits that advertisers may opt, among other payment and billing options, to pay Google based on the number of internet users who click 4. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page5 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO on their ads. Except as expressly admitted herein, Google lacks information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 18, and on that basis, denies them. 19. Google admits that one aspect of the AdWords advertising program allows advertisers to place their ads on third party sites in the Google Network. Google also admits that at one point in time, among other descriptions, it described the AdSense program similarly to the blocked-quote in paragraph 19, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the AdSense program. Except as expressly admitted herein, Google denies the allegations of paragraph 19. 20. 21. Denied. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 21, and on that basis, denies them. 22. Google admits that at one point in time, among other descriptions, it described the Content Network similarly to the quote in paragraph 22, but denies that Plaintiffs have put the quote in the proper context and that the description is a complete description of the Content Network or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 22. 23. Google admits that it has at times used language similar to the quoted language in paragraph 23 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the AdWords advertising program or Plaint iffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 23. 24. Google admits that it has at times used language similar to the quoted language in paragraph 24 on its website concerning the Content Network or AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the Content Network or AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising 5. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page6 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO program. Except as expressly admitted herein, Google denies the allegations of paragraph 24. 25. Google lacks knowledge or informat ion sufficient to form a belief as to the truth of the allegations of paragraph 25, and on that basis, denies them. 26. Google admits that "AdSense for Domains" is an advertising program in which owners of parked domain pages allow the placement of AdWords advertisements on such pages and in which Google uses its technology to target advertisements to such pages. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 26, and on that basis, denies them. 27. Google admits that at one point in time, among other descriptions, it described "AdSense for Domains" similar to the blocked-quote in paragraph 27, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the "AdSense for Domains" program. Except as expressly admitted herein, Google denies the allegations of paragraph 27. 28. 29. 30. Denied. Denied. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 30, and on that basis, denies them. B. Google's Monetization of AdWords Advertisements. 31. Google admits AdWords advertisers may opt to be billed by and to pay Google on a cost per click or cost per thousand impressions basis. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 31, and on that basis, denies them. 32. Google admits that one aspect of its AdWords advertising program involves a cost per click basis and that an advertiser choosing to be billed by and to pay Google on that basis pays a fee for each time the advertiser's ad is clicked on. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 32, and on that basis, denies them. 33. Google admits that one aspect of its AdWords advertising program involves a cost 6. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page7 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO per thousand impressions basis and that an advertiser choosing to be billed by and to pay Google on that basis pays for impressions received. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 33, and on that basis, denies them. 34. Google admits that one aspect of its AdWords advertising program involves a cost per click basis. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 34, and on that basis, denies them. 35. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 35, and on that basis, denies them. 36. C. Denied. Google's Unlawful Conduct. 37. 38. 39. Denied. Denied. Google admits that it has at times used language similar to the quoted language in paragraph 39 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 39. 40. Google admits that it has at times used language similar to the quoted language in paragraph 40 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 40. 41. Google admits that it has at times used language similar to the quoted language in paragraph 41 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a 7. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page8 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 41. 42. Google admits that it has at times used language similar to the quoted language in paragraph 42 on its website concerning the AdWords advertising program, but denies that Plaintiffs have put the quoted language in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as expressly admitted herein, Google denies the allegations of paragraph 42. 43. 44. Denied. Google admits that at one point in time, among other descriptions, it described the Content Network similarly to the blocked-quote in paragraph 44, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the Content Network or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as admitted herein, Google denies the allegations of paragraph 44. 45. Google admits that at one point in time, among other descriptions, it described the AdWords advertising program similarly to the blocked-quote in paragraph 45, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the AdWords advertising program or Plaintiffs' respective contractual relationships with Google relating to the AdWords advertising program. Except as admitted herein, Google denies the allegations of paragraph 45. 46. 47. 48. 49. 50. 51. Denied. Denied. Denied. Denied. Denied. Denied. 8. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page9 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 52. 53. Denied. Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraph 53, and on that basis, denies them. 54. Google admits that AdWords advertisers can choose various settings relating to the placement of advertisements. Except as expressly admitted herein, Google denies the allegations of paragraph 54. 55. 56. Denied. Google admits that plaintiff Hal K. Levitte contracted for and used Google's AdWords advertising program and that it had communications with him. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 56, and on that basis, denies them. 57. Google admits that plaintiff Hal K. Levitte contracted for and used Google's AdWords advertising program and that it had communications with him. Except as expressly admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 57, and on that basis, denies them. 58. Google admits that it posted a blog on or about March 6, 2008 regarding Google's Except as expressly admitted herein, Google denies the site and category exclusion tool. allegations of paragraph 58. 59. 60. 61. 62. 63. Denied. Denied. Denied. Denied. Google admits that at one point in time, among other descriptions, it described the Placement Performance Report similarly to the blocked-quote in paragraph 63, but denies that Plaintiffs have put the block quote in the proper context and that the description is a complete description of the Placement Performance Report. Except as admitted herein, Google lacks knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 63, and on that basis, denies them. 9. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page10 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 64. Google admits that the Placement Performance Report is an AdWords report that presently provides site-by-site performance metrics for ads across the Content Network. Except as expressly admitted herein, Google denies the allegations of paragraph 64. 65. 66. 67. 68. Denied. Denied. Denied. Google admits that Plaintiffs accurately quote from one out-of-context sentence of a multi-sentence blog posting on June 12, 2007, but denies that Plaintiffs have put the quote in the proper context or that Plaintiffs' quote is the complete blog posting. Except as expressly admitted herein, Google denies the allegations of paragraph 68. 69. 70. Denied. Google admits that it posted a blog entry on May 2, 2008 with the title "Where did I park?" on the AdWords Agency Blog. Except as expressly admitted herein, Google denies the allegations of paragraph 70. 71. Google admits that Plaintiffs quote a portion of the blog entry referred to in paragraph 70, but denies that Plaintiffs have put the quote in the proper context or that Plaintiffs' quote is the complete blog posting. Except as expressly admitted herein, Google denies the allegations of paragraph 71. 72. 73. Denied. Denied. CLASS ALLEGATIONS 74. Google admits that Plaintiffs purport to bring this action individually and on behalf of a putative class of AdWords advertisers. Except as expressly admitted herein, Google denies the allegations of paragraph 74. 75. Google admits that Plaintiffs purport to bring this action individually and on behalf of a putative class of AdWords advertisers. Except as expressly admitted herein, Google denies the allegations of paragraph 75. 76. Google admits that Plaintiff purports to bring this action individually and on behalf 10. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page11 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO of a putative class of AdWords advertisers. Except as expressly admitted herein, Google denies the allegations of paragraph 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. Denied. Denied. Denied. Denied. Denied. Denied. Denied. Denied. The allegations of paragraph 85 are legal conclusions to which no response is required. To the extent a response is required, Google denies the allegations of paragraph 85. FIRST CLAIM FOR RELIEF (VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE SECTION 17200 ET SEQ. "UNFAIR" CONDUCT) 86. Google hereby incorporates as through fully set forth herein its answers to paragraphs 1 through 85. 87. 88. 89. 90. 91. 92. 93. 94. Denied. Denied. Denied. Denied. Denied. Denied. Denied. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 94, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 94. 95. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 95, 11. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page12 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 95. SECOND CLAIM FOR RELIEF (VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE SECTION 17200 ET SEQ. "FRAUDULENT" CONDUCT) 96. Google hereby incorporates as through fully set forth herein its answers to paragraphs 1 through 95. 97. 98. 99. 100. 101. 102. 103. 104. Denied. Denied. Denied. Denied. Denied. Denied. Denied. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 104, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 104. 105. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 105, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 105. THIRD CLAIM FOR RELIEF (VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE 17200 ET SEQ. "UNLAWFUL" CONDUCT) 106. Google hereby incorporates as through fully set forth herein its answers to paragraphs 1 through 105. 107. 108. 109. 110. Denied. Denied. Denied. Denied. 12. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page13 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 111. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 111, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 111. 112. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 112, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 112. FOURTH CLAIM FOR RELIEF (VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE SECTION 17500 ET SEQ.) 113. Google hereby incorporates as through fully set forth herein its answers to paragraphs 1 through 112. 114. Google admits that Plaintiffs purport to bring this action individually and on behalf of a putative class of AdWords advertisers. Except as expressly admitted herein, Google denies the allegations of paragraph 114. 115. 116. 117. 118. 119. Admitted. Denied. Denied. Denied. Google admits that Plaintiffs purportedly seek the relief requested in paragraph 119, but denies that Plaintiffs are entitled to the relief requested. Except as expressly admitted herein, Google denies the allegations of paragraph 119. FIFTH CLAIM FOR RELIEF (UNJUST ENRICHMENT) 120. Google hereby incorporates as through fully set forth herein its answers to paragraphs 1 through 119. 121. 122. 123. Denied. Denied. Denied. 13. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page14 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 124. Denied. Google denies that Plaintiffs are entitled to a judgment or to any other relief as requested in the "PRAYER FOR RELIEF." SEPARATE AND ADDITIONAL DEFENSES As and for separate and additional defenses, Google alleges as follows: FIRST SEPARATE AND ADDITIONAL DEFENSE (Failure to State a Cause of Action) 1. The Consolidated Complaint and each and every claim alleged therein fail to state facts sufficient to constitute a cause of action upon which relief may be granted. SECOND SEPARATE AND ADDITIONAL DEFENSE (Lack of Standing) 2. Plaint iffs lack standing to assert the claims alleged in the Consolidated Complaint both individually and on behalf of the putative class. THIRD SEPARATE AND ADDITIONAL DEFENSE (No Harm) 3. Google is informed and believes, and therefore alleges, that neither Plaintiffs nor any putative class member sustained any loss, damage, harm, or detriment in any amount as a result of any alleged acts, omissions, fault, fraud, carelessness, recklessness, negligence, or other breach of duty by Google. FOURTH SEPARATE AND ADDITIONAL DEFENSE (Res Judicata/Collateral Estoppel) 4. Plaint iffs and some or all of the putative class members are barred from pursuing the Consolidated Complaint and the claims asserted therein against Google pursuant to the Final Order and Judgment Approving Settlement, Certifying Class for Settlement Purposes, Awarding Class Counsel Attorneys' Fees and Dismissing Action With Prejudice, entered by the Honorable Joe E. Griffin, Circuit Court Judge in the Circuit Court of Miller County, Arkansas on June 26, 2006 in Lane's Gifts & Collectibles LLC, et. al. v. Yahoo! Inc., et. al., Case No. CV-2005-52-1. /// 14. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page15 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO FIFTH SEPARATE AND ADDITIONAL DEFENSE (LACHES) 5. The Consolidated Complaint and the claims asserted therein are barred by the doctrine of laches. SIXTH SEPARATE AND ADDITIONAL DEFENSE (UNCLEAN HANDS) 6. The Consolidated Complaint and the claims asserted therein are barred by the doctrine of unclean hands. SEVENTH SEPARATE AND ADDITIONAL DEFENSE (ESTOPPEL) 7. The Consolidated Complaint and the claims asserted therein are barred by the doctrine of estoppel. EIGHTH SEPARATE AND ADDITIONAL DEFENSE (WAIVER) 8. The Consolidated Complaint and the claims asserted therein are barred by the doctrine of waiver. NINTH SEPARATE AND ADDITIONAL DEFENSE (JUSTIFICATION) 9. The Conso lidated Complaint and the claims asserted therein are barred because to the extent Google engaged in any of the alleged acts, omissions, or conduct, it did so with justification. TENTH SEPARATE AND ADDITIONAL DEFENSE (NO QUASI-CONTRACTUAL REMEDY) 10. Plaint iffs' claim for unjust enrichment, assuming arguendo unjust enrichment is a separate and distinct claim or cause of action, is barred because unjust enrichment is a quasicontractual remedy that cannot be stated here because there are express contracts between Plaintiffs, respectively, and Google. /// 15. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page16 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO ELEVENTH SEPARATE AND ADDITIONAL DEFENSE (CONTRACT) 11. The Consolidated Complaint and claims asserted therein are barred because the parties entered into a contract that contemplated, provided for, and authorized the acts or conduct complained of and on which recovery is sought. TWELFTH SEPARATE AND ADDITIONAL DEFENSE (CONSENT OR AUTHORIZATION) 12. The Consolidated Complaint and claims asserted therein are barred because Plaintiffs expressly or impliedly approved, authorized, ratified, or consented to the complained acts or conduct, and are therefore precluded from recovery. THIRTEENTH SEPARATE AND ADDITIONAL DEFENSE (STATUTE OF LIMITATIONS) 13. The Consolidated Complaint and claims asserted therein are barred, in whole or in part, by the applicable statute of limitations, including, but not limited to, California Code of Civil Procedure sections 338 and 340 and California Business and Professions code section 17208. FOURTEENTH SEPARATE AND ADDITIONAL DEFENSE (FAILURE TO MITIGATE) 14. The Consolidated Complaint and claims asserted therein are barred, in whole or in part, by Plaintiffs and the putative class' failure to mitigate their damages, if any. FIFTEENTH SEPARATE AND ADDITIONAL DEFENSE (SUFFICIENCY OF CLASS ACTION) 15. This consolidated action is not maintainable as a class action, and relief on a class- wide basis is not appropriate because Plaintiffs have failed to allege and cannot prove the facts and prerequisites necessary for the maintenance of a class action, including but not limited to typicality, numerosity, commonality, superiority of class-based resolution, adequacy of class representative and class counsel, or predomination of common questions. /// 16. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page17 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO SIXTEENTH SEPARATE AND ADDITIONAL DEFENSE (ADDITIONAL DEFENSES) 16. Google hereby reserves its right to seek leave to amend this Answer to set forth additional defenses based on its ongoing investigation and discovery into the matters alleged in the Consolidated Complaint. COUNTERCLAIM AGAINST JIT PACKAGING INC. Pursuant to Rule 13 of the Federal Rules of Civil Procedure, Counterclaim-Plaintiff Google Inc. ("Google") alleges for its Counterclaim against Counterclaim-Defendant JIT Packaging, Inc. ("JIT") as follows: NATURE OF ACTION 1. This counterclaim is an action for breach of contract arising out of JIT initiating and maintaining a nearly identical, related putative class action in the United States District Court for the Northern District of Illinois before filing the instant action. JIT's conduct violated the clear and conspicuous choice of law and forum selection clauses in its written contract with Google. The Northern District of Illinois Action is entitled JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv-4543 (RMD) (filed Aug. 11, 2008; closed on Oct. 8, 2008) ("N.D. Ill. Action"). Before consolidation, JIT's action in this court was known as JIT Packaging, Inc. v. Google Inc., N.D. Cal., Case No. 08-cv-04701 (filed Oct. 10, 2008; administratively closed pursuant to order on Feb. 25, 2009). PARTIES 2. Google is a corporation organized and existing under the laws of the state of Delaware with its principal place of business located at 1600 Amphitheatre Parkway, Mountain View, California. 3. JIT previously alleged in this action in its prior complaint that it is an Illinois corporation located at 1452 Brewster Creek Blvd, Bartlett, Illinois. See JIT Packaging, Inc. v. Google Inc., N.D. Cal., Case No. 08-cv-04701, Docket No. 1 (complaint). /// 17. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page18 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO JURISDICTION AND VENUE 4. This Court has supplemental subject matter jurisdiction over Google's counterclaim under 28 U.S.C. 1367(a) because it arises out of the same transaction or occurrence that is the subject matter of JIT's claims and does not require adding another party over whom the Court cannot acquire jurisdiction. 5. By filing this action in this Court, JIT has consented to personal jurisdiction in this Court. Moreover, JIT consented to personal jurisdiction in this Court under the parties' written contract. 6. Venue is proper in the Northern District of California pursuant to 28 U.S.C. 1391 by virtue of JIT's admissions in this action, including its prior complaint and the Consolidated Complaint, that venue is proper in this district. Additionally, venue is proper in this district under the parties' written contract. 7. this action. FACTUAL BACKGROUND 8. On or around February 2004, JIT entered into various written contracts with No other forum would be more convenient for the parties and witnesses to litigate Google regarding Google's AdWords advertising program. JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv-4543 (RMD), Docket No. 1 (complaint, at 4, 63, 73, 82, Exhibit A). 9. Subsequently, on or after August 22, 2006, and before filing the N.D. Ill. Action, JIT entered into a written contract entitled "Google Inc. Advertising Program Terms" (hereinafter "AdWords Contract"). JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv-4543 (RMD), Docket No. 1 (complaint, at 4, 63, 73, 82, Exhibit A). A true and correct copy of the AdWords Contract is attached as Exhibit 1 hereto.1 10. The AdWords Contract states, in relevant part: These Google Inc. Advertising Program Terms, ("Terms") are 1 JIT also attached a copy of the AdWords Contract to its Complaint in the N.D. Ill. Action and to its prior complaint in this action. JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv4543 (RMD), Docket No. 1 (complaint); JIT Packaging, Inc. v. Google Inc., N.D. Cal., Case No. 08-cv-04701, Docket No. 1 (complaint). 18. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page19 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO entered into by, as applicable, the customer signing these Terms or any document that references these Terms or that accepts these Terms electronically ("Customer") and Google Inc. ("Google"). These Terms govern Customer's participation in Google's advertising program(s) ("Program") and, as applicable, any insertion orders or service agreements ("IO") executed by and between the parties and/or Customer's online management of any advertising campaigns. These Terms and any applicable IO are collectively referred to as the "Agreement." Google and Customer hereby agree and acknowledge: ... 9. Miscellaneous. THE AGREEMENT MUST BE CONSTRUED AS IF BOTH PARTIES JOINTLY WROTE IT AND GOVERNED BY CALIFORNIA LAW EXCEPT FOR ITS CONFLICTS OF LAWS PRINCIPLES. ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE GOOGLE PROGRAM(S) SHALL BE LITIGATED EXCLUSIVELY IN THE FEDERAL OR STATE COURTS OF SANTA CLARA COUNTY, CALIFORNIA, CONSENT COURTS.... 11. In accordance with the terms and provisions of the AdWords Contract, Google TO USA, AND GOOGLE AND CUSTOMER IN THOSE PERSONAL JURISDICTION fully and completely performed each and every act or thing required on its part to be performed under that agreement, except those that have been excused as a result of JIT's conduct. 12. Despite the choice of law and forum selection clauses in the AdWords Contract, and in breach thereof, JIT initiated the N.D. Ill. Action against Google on August 11, 2008. That action was based on the same conduct alleged in this action, but that action purported to assert 19. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page20 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO various common law and statutory claims under Illinois law. Like this action, JIT styled the N.D. Ill. Action complaint as a putative nationwide class action. 13. After JIT breached the AdWords Contract by initiating the N.D. Ill. Action, Google, through its counsel of record, repeatedly communicated with JIT, through its counsel of record, to (a) notify JIT of its breach and (b) to request that JIT voluntarily dismiss the N.D. Ill. Action and re-file in this Court under California law to limit the damage to Google from JIT's breach. Despite Google's repeated communications with JIT from August 26, 2008 to September 30, 2008, including specifically advising JIT on September 24, 2008 that Google would seek to recover its costs and attorneys fees incurred in enforcing the forum selection clause, JIT refused to dismiss and re-file in this Court. Accordingly, on September 30, 2008, JIT's conduct forced Google to file a motion to dismiss (or alternatively to transfer) the action under Rules 12(b)(3) and 12(b)(6) of the Federal Rules of Civil Procedure and 28 U.S.C. 1404 based on the choice of law and forum selection clauses in the AdWords Contract. JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv-4543 (RMD), Docket Nos. 22 and 23 14. Only after forcing Google to file its motion to dismiss did JIT relent. On October 8, 2008, JIT filed a stipulation of dismissal without prejudice of the N.D. Ill. Action complaint, and the court closed the case on that date. JIT Packaging, Inc. v. Google Inc., N.D. Ill., Case No. 08-cv-4543 (RMD), Docket Nos. 27 and 28. 15. On October 10, 2008, JIT initiated the instant action, which was subsequently consolidated with three other earlier filed actions against Google relating to Google's AdWords advertising program. 16. Google has incurred significant expense because of JIT's breach of the AdWords Contract, including, but not limited to, attorneys' fees and costs in communicating with JIT regarding its breach and requesting that JIT dismiss, in preparing and filing its motion to dismiss in the N.D. Ill. Action, and in eventually obtaining dismissal of that action and other costs. /// 20. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page21 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO COUNTERCLAIM COUNT I (Breach of Contract) 17. Google hereby repeats and re-alleges the information set forth in paragraphs 1 - 16 of this Counterclaim, as if fully set forth herein. 18. On or after August 22, 2006, and before filing the N.D. Ill. Action, JIT entered into the AdWords Contract with Google. 19. The AdWords Contract contains a clear and conspicuous choice of law and forum selection clauses that mandate that any action arising out of or relating to the AdWords Contract or to Google program(s) be litigated in federal or state court in Santa Clara County, California and that California law governs. 20. Google fully and completely performed each and every act or thing required on its part to be performed under that agreement, except those that have been excused as a result of JIT's conduct. 21. JIT breached the agreement by filing the N.D. Ill. Action and by maintaining it until October 8, 2008. 22. As a result of JIT's breach of contract, Google has suffered damages as alleged herein in an amount to be proven at trial. PRAYER FOR RELIEF WHEREFORE, Google prays for relief and judgment as follows: 1. That the Court deny Plaintiffs' prayer for relief in its entirety and that the Court dismiss the Consolidated Complaint with prejudice and enter judgment in Google's favor and against Plaintiffs; 2. That the Court award Google its costs and expenses that it incurs in this action and attorneys' fees as permitted by law; 3. Counterclaim; 4. proof; and 21. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL That judgment enter in Google's favor and against JIT as to Google's That the Court award Google damages against JIT in an amount according to Case5:08-cv-03369-JW Document77 Filed03/04/10 Page22 of 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COOLEY GODWARD KRONISH LLP A T T O R N E Y S AT L A W S A N DIEGO 5. appropriate. That the Court award Google such other and further relief that it deems Dated: March 4, 2010 COOLEY GODWARD KRONISH LLP MICHAEL G. RHODES (116127) PETER J. WILLSEY (admitted pro hac vice) LEO P. NORTON (216282) /s/ Leo P. Norton Leo P. Norton Attorneys for Defendant GOOGLE INC. Email: lnorton@cooley.com 665216 /SD 22. ANSWER & COUNTERCLAIM TO AM. CONSOL. COMPL. CASE NO. 08-CV-03369 JW HRL Case5:08-cv-03369-JW Document77 Filed03/04/10 Page23 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page24 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page25 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page26 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page27 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page28 of 29 Case5:08-cv-03369-JW Document77 Filed03/04/10 Page29 of 29