Mizera v. Google

Filing 31

Mizera v. Google

Doc. 31 Att. 3

Case 5:05-cv-02885-RMW

Document 31-4

Filed 03/29/2006

Page 1 of 6

EXHIBIT C

Dockets.Justia.com

Case 5:05-cv-02885-RMW

Document 31-4

Filed 03/29/2006

Page 2 of 6

ase 5:05-cv-02885-RMW Document 28 Filed 03/16/2006 Page 1 of 5

1 KEKER & VAN NEST, LLP

DARA YN J. DURIE - #169825
2 DAVIDJ. SILBERT-#173128 710 Sansome Street
3 San Francisco, CA 94111-1704 Telephone: [phone]

4 Facsimile: [phone]

Email: ddurie(êkvn.com 5 dsilbert(êkvn.com
6 Attorneys for Defendant GO

OGLE, INC.

7
8

UNITED STATES DISTRICT COURT
9

NORTHERN DISTRICT OF CALIFORNIA
10

SAN JOSE DIVISION
11

ADV ANCED INTERNT TECHNOLOGIES, Case No. C 05 02579 RMW
12 INC., a North Carolina corporation,

Individually and on behalf of all others Consolidated with

13 similarly situated, Case No. C 05 02885 RMW
14
15

Plaintiffs,
v.

DEFENDANT GOOGLE INe'S REPLY IN SUPPORT OF MOTION TO STAY PENDING SETTLEMENT
Hon. Ronald M. Whyte

16 GOOGLE, INC., a Delaware corporation, and Judge:
DOES 1 through 100, Inclusive,
17

Date Compo Filed: June 24, 2005

Defendants.
18

Trial Date: None set

20 Plaintiff,
21 v.
23

STEVE MIZERA, an Individual, individually 19 and on behalf of all others similarly situated,

22 GOOGLE, INC., a Delaware corporation; and DOES 1 through 100, inclusive,

Defendants.
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26 27
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369237.01

GOOGLE'S REPLY I/S/O MOTION TO STAY

Case No. C 05 02579 RM Consolidated with C 05 02885 RMW

Case 5:05-cv-02885-RMW

Document 31-4

Filed 03/29/2006

Page 3 of 6

ase 5:05-cv-02885-RMW Document 28 Filed 03/16/2006 Page 2 of 5

1

I.

INTRODUeTION

2 When plaintiffs fie identical class actions in different forums, it is inevitable that one of
3 those suits wil be resolved first. If

that resolution is a settlement-as the vast majority are-it is

4 equally inevitable that the plaintiffs who did not settle wil attack the settlement as collusive,
5 inadequate, and the product of a "reverse auction." Federal and state laws provide elaborate
. 6 rules and procedures to consider those objections, requiring fairness hearings at which courts

7 scrutinize class settlements. What those laws do not sanction, however-indeed, what principles
8 of federal-state comity prohibit-is for one court to disdain and ignore another court's judgment.

9 Yet that is exactly what AIT asks this Court to do.

10 AIT is wrong in asserting that the class settlement is inadequate in light ofthe case's
11 supposed merits. But right or wrong, the proper forum for AIT to raise its objections is the

12 Arkansas court, which wil conduct the fairness hearing. This Court cannot, and should not,
13 undermine the state court's jurisdiction by undertaking to evaluate those issues itself.

14 In the unlikely event that the Arkansas court agrees with AIT, it wil reject the settlement.

15 See Ballardv. Martin, 349 Ark. 564, 575 (Ark. 2002) ("no court should accept a settlement that
16 is unfair or inadequate, and the burden is on the proponents ofthe settlement to show that the

17 proposed settlement meets standards of fairness and adequacy"). In that case, AIT may resume
18 this action within a matter of months, having suffered no prejudice. On the other hand, if

the

19 Arkansas court approves the settlement, as it almost certainly wil, the settlement wil bind class
20 members as res judicata, and wil resolve and preclude the class claims that AIT is asserting

21 here. See Noel v. Hall, 341 F.3d 1148, 1160 (9th Cir. 2003); East Texas Motor Freight Lines,

22 Inc. v. Freeman, 289 Ark. 539, 543 (1986). In that case, the intensive litigation activities that the 23 parties and this Court wil conduct in the coming weeks and months without a stay would be, at

24 best, a waste of time and resources.
25 Because a stay wil afford the proper deference to the state court's jurisdiction, will
26 conserve the parties' and the Court's resources, and will not prejudice AIT, the Court should stay
27 this action pending finalization of

the class settlement.

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369237.01

GOOGLE'S REPLY I/S/O MOTION TO STAY

Case No. C 05 02579 RM Consolidated with C 05 02885 RMW

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II. ARGUMENT
2 A.
3

Denying a stay for the reasons AIT urges would violate the principles of federalstate comity

As Google observed in its motion, when parties to a class action reach a settlement,
4

federal courts have held it appropriate to stay even litigation in other courts to permit that
5

settlement to be finalized-a far more drastic step than what Google is requesting here. See, e.g.,
6

Sandpiper Vil. Condo. Ass'n v. Louisiana-Pacifc Corp., 428 F.3d 831, 845 (9th Cir. 2005); In re
7
Wireless TeL. Fed. Cost Recovery Fees Litg., 396 F.3d 922, 927 (8th Cir. 2005). These decisions

8

underscore the importance of facilitating settlements in class actions, and of ensuring that
9

parallel class-action proceedings do not become a tool for other parties to try to derail those
10

settlements. Id.,' see also Armstrong v. Board of Sch. Directors., 616 F .2d 305, 313 (7th Circ.
11

1980) ("In the class action context in particular, there is an overriding public interest in favor of
12

settlement.")
13
AU twists the teaching of

those cases, however, by arguing that their guiding principle is
this Court were

14
thatfederal courts should assert priority over state courts. See Opp. at 5:4-8. If

15

to deny a stay on that ground, it would violate the most basic principles federal-state comity,
16
which mandate "a system in which there is sensitivity to the legitimate interests of

both State and

17

National Governments, and in which the National Government, anxious though it may be to
18

vindicate and protect federal rights and federal interests, always endeavors to do so in ways that
19

wil not unduly interfere with the legitimate activities ofthe States." Younger v. Harris, 401
20
U.S. 37, 44-45 (1971).
21

Indeed, recognizing the requirements of comity, as well as the overriding interest in
22

conserving judicial resources, federal courts have repeatedly stayed their own class-action
23

proceedings when the defendant has reached a settlement in a parallel state class action-exactly
24

as Google is requesting here. See, e.g., Chartner v. Provident Mutual Life Ins. Co., 2003 WL
25
22518526 (E.D. Pa. 2003) (staying federal class action pending approval of

class settlement

26

reached in state court); Schwartz v. Prudential-Bache Securities, Inc., 1991 WL 137157 (E.D.
27

Pa. 1991) (same). This Court should do the same. That the settlement was reached in the
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2 GOOGLE'S REPLY I/S/O MOTION TO STAY

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1 Nor do
original state-court case, rather than this case, has no bearing on the need for a stay.

2 AIT's allegations that the settlement is unfair or inadequate?

3 B.

A stay wil conserve significant resources and wil not prejudice AIT
the settlement, and its entreaties to this Court to

4 For all AIT's attacks on the merits of

5 seize control of that issue from the state court, it does not dispute the fundamental circumstances

6 that require a stay. AIT does not deny, because it could not, that under the "full faith and credit"
7 provisions of federal

law, ifthe Arkansas court approves the class settlement, that ruling wil act

8 as res

judicata and bar AIT's class claims in this action. See discussion in Google's Motion at

9 4:5-16; see also Wright Miler & Kane, Federal Practice & Procedure: Civi/2d § 4455 n.7; 18

10 Moore's Federal Practice § 131.4(3)( c) (both noting that settlements of class actions bind all
11 members of

the class). Upon approval, therefore, the settlement wil resolve, on a class-wide

12 basis, all ofthe claims that AIT is asserting here.

13 For that reason, it would serve no purpose for the parties and this Court to spend the
14 months pending approval strenuously litigating class certification, discovery, and other issues (as

15 they unquestionably wil), when those activities wil have no effect on the resolution ofthe
16 claims. On the other hand, in the unlikely event that AIT is correct, and the state court wil not
17 approve the settlement, then this action may resume after only a brief delay, with no prejudice to
18
19

20
21

1 AIT's contention that the state-court settlement is not entitled to deference is paricularly ironic considering that Google tried to remove the Arkansas case to federal court, but both the district court in Arkansas and, on appeal, the Eight Circuit ordered it remanded to the state court. Under AIT's view, therefore, federal courts may order Google to litigate in state court, but they should prohibit it from settling in that forum. 2 While the merits of the settlement are not properly before this Court, and the parties wil
address them fully at the fairness hearing in Arkansas, even a cursory review of AIT' s claims

22
23

24
25

26 27 28

shows that its protests are unsupported. Unlikethe Arkansas plaintiffs, who allege in the alternative that Google's contracts with class members (including the forum-selection clause) are those contracts. Further, AIT void and unenforceable, AIT has conceded the enforceability of alleges that those contracts provided that advertisers pay "whenever someone clicks on your ad," licks that Google determines invalid" wil be filtered from advertisers' bils. and that only "(c) Motion for Class Certification irir 7 and 8 Clarence E. Briggs in Support of See Declaration of (emphasis added). It further alleges that the contracts provide that advertisers "waive all claims within 60 days after the charge." Id. Ex. A (emphasis added). relating to charges unless claimed And while AIT objects that the settlement fund includes credits, it alleges that the contracts specifically provide that "(r)refunds (if any) are at the discretion of Google and only in the form of advertising credit for Google Properties." Id. (emphasis added). This is but a small sampling ofthe reasons, both legal and factual, that AIT's claims cannot be certified as a class action, and would fail on the merits in any event.
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369237.01

GOOGLE'S REPLY I/S/O MOTION TO STAY Case No. C 0502579 RM Consolidated with C 05 02885 RMW

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AlT.
2 Courts should exercise their discretion to stay proceedings to conserve judicial resources
3 and to ensure that each case is adjudicated "with economy of

time and effort for itself, for
American Co., 299 U.s. 248, 254 (1936) (internal

4 counsel, and for litigants." Landis v. North

5 quotation marks omitted). Under these circumstances, that policy, as well as principles of
6 federal-state comity, and the interest in facilitating class-action settlements, mandate staying

7 these proceedings pending approval of the class settlement.
8

III. eONeLUSION

9 For these reasons, Goog1e respectfully requests that the Court grant its motion to stay.

10
11 Dated: March 16, 2006

KEKER & V AN NEST, LLP

12 13

By: Isl David Silbert
DA VID 1. SILBERT Attorneys for Defendant GOOGLE, INC.

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369237.01