Mizera v. Google

Filing 31

Attachment 1
Declaration of David J. Silbert filed byGoogle Inc.,. (Attachments: # 1 Exhibit A# 2 Exhibit B# 3 Exhibit C# 4 Exhibit D)(Silbert, David) (Filed on 3/29/2006)

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Mizera v. Google Doc. 31 Att. 1 Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 1 of 7 EXHIBIT A Dockets.Justia.com Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 2 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 1 of 6 1 KEKER & V AN NEST, LLP DAR YN J. DURIE - # 169825 2 DAVID J. SILBERT - #173128 San Francisco, CA 941 1 1 - 1 704 3 Telephone: (415) 391-5400 Facsimile: (415) 397-7188 4 Email: ddurie~kvn.com dsilbert~kvn.com 5 Attorneys for Defendant GOOGLE, INC. 6 7 8 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION 9 10 11 ADVANCED INTERNT TECHNOLOGIES, Case No. C 05 02579 RMW 12 Individually and on behalf of all others Consolidated with 13 INC., a North Carolina corporation, similarly situated, Case No. C 0502885 RMW Plaintiffs, DEFENDANT GO OGLE INe'S MOTION Hon. Ronald M. Whyte 14 TO STAY PENDING SETTLEMENT v. 15 Judge: GOOGLE, INC., a Delaware corporation, and 16 DOES 1 through 100, Inclusive, Date Compo Filed: June 24, 2005 17 Defendants. Trial Date: None set 18 STEVE MIZERA, an Individual, individually and on behalf of all others similarly situated, 19 Plaintiff, 20 v. 21 GOOGLE, INC., a Delaware corporation; and 22 DOES 1 through 100, inclusive, 23 Defendants. 24 25 26 27 28 368912.01 GOOGLE'S MOTION TO STAY PENDING SETTLEMENT Case No. C 05 02579 RM Consolidated with C 05 02885 RMW Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 3 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 2 of 6 1 I. INTRODUeTION 2 Under Civil L.R. 7-11, defendant Google Inc. ("Google") moves for an administrative 3 order staying this action pending judicial approval of a class settlement that the parties have 4 reached in an overlapping, and earlier filed, nationwide class action pending in state court in 5 Arkansas. 6 After more than a year of litigation, and settlement negotiations presided over by retired 7 United States District Judge Layn R. Philips, Google and the plaintiffs in the Arkansas case 8 have reached a comprehensive class settlement that, once finalized, wil resolve all ofthe class 9 claims pending before this Court. Under the nationwide settlement, Google wil establish a 10 settlement fund to resolve, on a class-wide basis, all claims arising out of alleged "click fraud" or 11 other invalid clicks on pay-per-click advertisements-the same claims that the plaintiffs are 12 asserting here. Thus, staying this case pending approval of the settlement wil conserve judicial 13 resources, wil avoid needless and wasteful expenditure of the parties' resources on discovery 14 and motion practice, and wil support judicial comity. 15 Further, a stay wil not prejudice the named plaintiffs in this action. Advanced Internet 16 Technologies, Inc. ("AIT"), one of the named plaintiffs, has moved to intervene as a plaintiff in 17 the Arkansas action. And even ifthat motion is denied, the named plaintiffs wil have the right 18 to opt out ofthe class settlement to protect their individual interests, and wil have all of the 19 protections afforded by Arkansas law to ensure that the settlement adequately protects the class's 20 interests, including the right to object to the settlement. 21 For the foregoing reasons, and as explained in more detail below, Goog1e respectfully 22 requests that the Court enter the accompanying Proposed Order staying this action pending 23 approval of the class settlement reached in the Arkansas action. 24 II. BAeKGROUN 25 This is a "copycat" lawsuit based upon an earlier suit alleging that Google and other pay26 per-click advertising companies overcharged advertisers as a result of "click fraud." The original 27 action, which is pending in Circuit Court in Miler County, Arkansas, was fied on February 5, 28 2005, and asserts claims on behalf of a nationwide class for breach of contract, unjust i 368912.01 GOOGLE'S MOTION CTO STAY Consolidated with C 05 02885 RMW PENDING SETTLEMENT Case No. 0502579 RM Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 4 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 3 of 6 enrichment, and civil conspiracy. A copy ofthe Second Amended Complaint in the Arkansas 2 3 action is attached is Exhibit A to the Declaration of David 1. Silbert ("Silbert Decl."). Some five months after the Arkansas plaintiffs filed their class-action complaint, Click 4 5 Defense, Inc. commenced this action, making virtally identical allegations. A copy of Click Defense's Complaint, filed on June 24, 2005, is attached as Exhibit B to the Silbert Declaration. 6 AIT has since replaced Click Defense as the named plaintiff in this action, and has adopted Click Defense's complaint as its own. In addition, in January 2006, the Click Defense/AIT action was 7 8 consolidated with one fied on July 15,2005 by Steve Mizera. Mizera is represented by the same attorneys as Click Defense and AIT, and his allegations duplicate theirs. A copy ofMizera's Complaint is attached as Exhibit C to the Silbert Declaration. 9 10 11 After a year of intensive litigation in Arkansas, including litigating at the trial and appellate court levels in both state and federal court, Google and the plaintiffs agreed to engage 12 13 in discussions to attempt to settle the case. See Silbert Decl..~ 5. In Februar 2006, the paries held a two-day mediation before the Hon. Layn R. Philips, a retired United States District Judge 14 15 and former United States Attorney, and a highly regarded mediator. Id. ~ 6. Though the settlement process that Judge Philips oversaw, the parties ultimately signed a confidential 16 17 18 settlement agreement. Id. ~ 7. While the details of that agreement are stil confidential, its principal terms include the creation of a nationwide settlement class, the establishment of a settlement fund with a total value of 19 up to $90 milion, and the resolution of all class members' 20 21 claims against Google relating to "click-fraud" or other invalid clicks on pay-per-click advertisements. Id. A hearing on preliminary approval ofthe settlement is currently set for 22 23 April 3, 2006. Id. ~ 8, Ex. D. Unless this Court enters a stay, the parties and the Court wil expend a great deal of 24 25 resources litigating matters that wil become moot once the class settlement is finalized. AIT fied its class-certification motion on March 6, and Google's opposition to that motion is 26 27 28 currently due on April 3, with a hearing set for May 16. Before Google fies its opposition, it will need to depose AIT, Click Defense, Mizera, Clarence Briggs (the declarant in support of AIT's motion), and possibly other witnesses as welL. AIT may also wish to depose additional 2 GOOGLE'S MOTION TO STAY PENDING SETTLEMENT Case No. C 05 02579 RM Consolidated with C 05 02885 RMW 368912.01 Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 5 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 4 of 6 1 witnesses. Other discovery activities are also underway, including AIT's, Mizera's and Click 2 Defense's responses to document requests, which are due in several weeks. Further, unless the 3 parties resolve their disputes, they may need to move in the next few weeks for the entry of a 4 protective order, and possibly for other relief as welL. Id. ~ 9. 5 III. ARGUMENT Principles of Judicial eomity And The Encouragement of Settlement Require A Stay of This Action Federal courts have repeatedly stressed that a stay is appropriate when necessary to 6 A. 7 8 support judicial comity and the encouragement of settlement. In Sandpiper Vil. Condo. Ass'n v. 9 Louisiana-Pacifc Corp., 428 F.3d 831 (9th Cir. 2005), for example, the Ninth Circuit held that a 10 federal district court properly stayed proceedings in another court in order to safeguard the 11 settlement process in a nationwide class action. As the Ninth Circuit explained, a stay was 12 appropriate to permit the settlement-approval process to proceed undisturbed: 13 We concluded that a temporary stay pending settlement of the nationwide class 14 action was appropriate. . . . A competing state class action covering a portion of the federal class posed a significant danger to the delicate and transitory process 15 of approving a settlement agreement, and thereby threatened the district court's ability to resolve the litigation. 16 Id. at 845. Thus, the Ninth Circuit recognized both the sensitivity and the importance of 17 finalizing national class-action settlements, and held that those interests warranted even a stay of 18 proceedings in another court. Id.; see also In re Wireless Tel. Fed. Cost Recovery Fees Litig., 19 396 F.3d 922, 927 (8th Cir. 2005) (noting district court's stay of all other class actions pending 20 settlement of the case before it). 21 In this case, of course, the Court need not impinge upon another court's jurisdiction in 22 order to safeguard "the delicate and transitory process of approving a settlement agreement. . . ." 23 Instead, it need only stay its own proceedings pending approval ofthe Arkansas settlement. This 24 Court unquestionably has the power, and would exercise it properly, by staying the case under 25 these circumstances. See Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 26 1465 (9th Cir. 1983) ("a trial court may, with propriety, find it is efficient for its own docket and 27 the fairest course for the parties to enter a stay of an action before it, pending resolution of 28 3 368912.01 GOOGLE'S MOTION TO STAY PENDING SETTLEMENT Case No. C 05 02579 RM Consolidated with C 05 02885 RMW Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 6 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 5 of 6 1 independent proceedings which bear upon the case."). Thus, a stay is necessary and appropriate 2 both to facilitate settlement and to promote judicial comity by permitting the Arkansas court to 3 finalize the class settlement undisturbed. 4 B. A Stay Wil eonserve the eourt's and the Parties' Resources 5 In addition, a stay will prevent the Court and the parties from wasting resources on 6 litigation that will serve no purpose. Once the settlement is finalized, it will preclude the class 7 claims that the plaintiffs are asserting here. As the Ninth Circuit has observed, the "full faith and 8 credit" provisions embodied in 28 U.S.C. 1738, "require() a federal court to give precisely the 9 preclusive effect to a state court judgment that the state prescribes for its own courts," in order to 1 0 "take into account concerns of both finality and federalism." Noel v. Hall, 341 F 3d 1 148, 1160 11 (9th Cir. 2003). Under Arkansas law, a final settlement of an action has a claim- and issue12 preclusive effect on all parties to the action. See, e.g., East Texas Motor Freight Lines, Inc. v. 13 Freeman, 289 Ark. 539, 543 (1986) ("Res judicata or claim preclusion bars the relitigation of 14 issues which were actually litigated or which could have been litigated in an earlier suit"). Thus, 15 because the settlement wil resolve all claims relating to "click fraud" on a class-wide basis, it 16 wil preclude any further class proceedings in this action. 17 Accordingly, by staying the case, this Court wil save itself and the paries from 18 expending enormous resources litigating issues (such as class certification) that wil have no 19 impact on the resolution of this case. On the other hand, ifthe Court did not enter a stay, the 20 parties would likely have to conduct numerous depositions, compile and produce tens of 21 thousands of pages of documents, and present motions to the Court, all to no end. 22 e. 23 The Named Plaintiffs Wil Not Be Prejudiced By a Stay Finally, a stay wil not prejudice the plaintiffs. As noted, AIT has moved to intervene in 24 25 the Arkansas action. See Silbert Dec!. ~ 8, Ex. D. Thus, AIT may be allowed to participate fully in the Arkansas case as a named plaintiff. Moreover, apart from any intervention, Arkansas law 26 27 28 provides a full panoply of rights by which an interested part may comment on or oppose a class-action settlement. See, e.g., Arkansas R. Civ. Pro. 23; Ark. R. App. Pro. 2(a)(9). Under Arkansas Rule of Civil Procedure 23, which is patterned on the Federal Rule, Arkansas courts 4 GOOGLE'S MOTION TO STAY PENDING SETTLEMENT Case No. C 05 02579 RM Consolidated with C 05 02885 RMW 368912.01 Case 5:05-cv-02885-RMW Document 31-2 Filed 03/29/2006 Page 7 of 7 ase 5:05-cv-02885-RMW Document 20 Filed 03/09/2006 Page 6 of 6 1 rigorously scrutinize class-action settlements to ensure fairness. See, e.g., Ballard v. Martin, 349 2 Ark. 564, 575 (Ark. 2002) ("no court should accept a settlement that is unfair or inadequate, and 3 the burden is on the proponents of the settlement to show that the proposed settlement meets 4 standards of fairness and adequacy"). Thus, if the named plaintiffs believe for any reason that 5 the settlement fails to protect the class's interests, they wil have a full and fair opportunity to 6 present their objections. 7 Moreover, if the named plaintiffs are dissatisfied with the settlement, they may, of 8 course, opt out of it and pursue their individual claims against Google. Thus, the plaintiffs can 9 be assured that their individual interests, as well as the class's interests, wil be safeguarded. 10 They wil suffer no prejudice that could weigh against the promotion offederal-state comity, the 11 encouragement of settlements, and the conservation of resources that wil result from a stay. i 12 iv. eONeLUSION 13 . For the foregoing reasons, Google respectfully requests that the Court enter a stay of all 14 proceedings in this action pending finalization ofthe settlement in the Arkansas action. 15 16 17 18 Dated: March 9, 2006 KEKER & V AN NEST, LLP By: Is/ David Silbert DAVID 1. SILBERT Attorneys for Defendant GOOGLE, INC. 19 20 21 22 23 24 25 26 27 28 i As set forth in the Silbert Declaration, counsel for the named plaintiffs has refused to stipulate to the entry ofa stay. See Silbert Decl. ~ 10. 5 368912.01 GOOGLE'S MOTION TO STAY PENDING SETTLEMENT Case No. C 05 02579 RM Consolidated with C 05 02885 RMW

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