CLRB Hanson Industries, LLC et al v. Google Inc.

Filing 309

Transcript of Proceedings held on 12/01/08, before Judge Ware. Court Reporter/Transcriber Irene L. Rodriguez, Telephone number (408)947-8160. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Redaction Request due 2/17/2009. Redacted Transcript Deadline set for 2/26/2009. Release of Transcript Restriction set for 4/27/2009. (Rodriguez, Irene) (Filed on 1/29/2009)

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C L R B Hanson Industries, LLC et al v. Google Inc. D o c . 30 1 2 3 4 5 6 IN THE U N I T E D S T A T E S DISTRICT COURT FOR T H E N O R T H E R N D I S T R I C T O F CALIFORNIA SAN JOSE DIVISION CLRB HANSON INDUSTRIES LLC , E T A L., PLAINTIFFS , 7 V. 8 GOGGLE , I N C. , 9 10 11 12 13 14 15 16 17 18 19 20 FOR THE DEFENDANT : 21 22 23 24 25 DEFENDANT. ___ ___ ___ ___ ___ ___ ___ __ ) ) ) ) ) ) ) ) ) ) ) C -05 -03649 -JW DECEMBER 1 , 2008 P A G E S 1 - 30 THE PROCEEDINGS WERE HELD BEFORE THE HONORABLE U N I T E D STATES DISTRICT JUDGE JAMES WARE A P P E A R A N C E S: FOR THE PLAINTIFFS: SUSMAN GODFREY BY: STEPHEN D. S U S M A N 5TH FLOOR 654 MADISON AVENUE NEW YORK, N E W YORK 10065 PERKINS COIE BY: D A V I D T . B I D E R M A N FARSCHAD FARZAN TIMOTHY J. FRANKS FOUR EMBARCADERO CENTER SUITE 2400 SAN FRANCISCO, CALIFORNIA 9 4 1 1 1 OFFICIAL COURT REPORTER : I R E N E RODRIGUEZ, C S R, CRR CERTIFICATE NUMBER 8074 1 U.S. COURT REPORTERS Dockets.Justia.co 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 SAN JOSE , CALIFORNIA DECEMBER 1, 2008 PROCEEDINGS ( WHEREUPON , C O U R T C O N V E N E D A N D THE FOLLOWING PROCEEDINGS WERE HELD: ) T H E CLERK: CALLING CASE NUMBER 05 -36 49, CLRB HANSON INDUSTRIES LLC , E T A L., V E R S U S G O O G L E, I N C. O N F O R DEFENDANT 'S MOTION F O R PARTIAL SUMMARY JUDGMENT. T E N MINUTES EACH SIDE. COUNSEL , COME FORWARD AND STATE YOUR APPEARANCES . T H E COURT: Y O U A R E. M R. SUSMAN : YOUR H O N O R, I'M STEVE SUSMAN D O N' T B E S H Y. TELL ME W H O OF SUSAN GODFREY ON BEHALF OF T H E PLAINTIFF CLASS. T H E COURT: M R. SUSMAN . GOOD MORNING, YOUR HONOR. M R. BIDERMAN: DAVID BIDERMAN ON B E H A L F O F G O O G L E. T H E COURT: M R. BIDERMAN. VERY WELL. A N D S O THIS IS YOUR MOTION , M R. BIDERMAN? M R. BIDERMAN: T H E COURT: SPEAK FURTHER TO IT? M R. BIDERMAN: I WOULD , AND I WOULD LIKE I T I S, YOUR H O N O R. D O YOU WANT T O A L L RIGHT. TO RESERVE SOME TIME F O R R E B U T T A L. 2 U.S. COURT REPORTERS 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 T H E COURT: A L L RIGHT. W E'V E ALLOWED T E N SO H O W MUCH TIME MINUTES FOR EACH SIDE F O R THIS. DO Y O U WANT F O R YOUR REBUTTAL ? M R. BIDERMAN: YOUR HONOR. T H E COURT: G O A H E A D. T H R E E MINUTES IS FINE, M R. BIDERMAN: YOUR HONOR , BASICALLY THE PLAINTIFFS HAVE T R I E D, I T H I N K, TO SORT O F C L O U D T H E I S S U E. B U T THIS CASE, THIS MOTION C A N COME TO THREE VERY SIMPLE P O I N T S, AND I' M ADDRESSING T H E 1 2 0 PERCENT RULE ISSUE. T H E COURT: R I G H T. BASICALLY THE COURT H A S M R. BIDERMAN: RULED ON M A Y 1 4TH , 2 008 THAT PLAINTIFFS A N D GOOGLE ENTERED INTO A CONTRACT WHICH SPECIFICALLY ALLOWED G O O G L E T O C H A R G E UP TO 120 PERCENT OF A D A I L Y BUDGET. THAT' S P O I N T N U M B E R ONE . SO THERE' S A CONTRACT CLAIM . T H E ONLY C L A I M THAT IS LEFT IS A 1 720 0 CLAIM F O R W H I C H T H E R E N E E D S T O B E SOME TYPE OF INJURY A F T E R PROP 64 . THAT'S POINT NUMBER O N E. P O I N T N U M B E R TWO IS WE SUBMITTED E V I D E N C E THAT, A, WE NEVER CHARGED THE PLAINTIFFS MORE THAN 1 2 0 PERCENT OF THEIR DAILY B U D G E T; AND , B , THAT WE NEVER CHARGED THE PLAINTIFFS MORE THAN THEIR DAILY 3 U.S. COURT REPORTERS 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 B U D G E T T I M E S E I T H E R THE N U M B E R O F DAYS IN A MONTH OR T H E N U M B E R OF DAYS I N A BILLING PERIOD , I F T H E BILLING PERIOD WERE SHORTER THAN A MONTH. T H E SECOND POINT. EVIDENCE . T H E THIRD POINT IS THAT I N R E S P O N S E T O THAT EVIDENCE, YOUR HONOR, WE HAVE SEEN NOTHING FROM THE PLAINTIFFS, NOTHING, NO N E W DECLARATIONS, NO N E W DEPOSITION TESTIMONY, NO EXCERPTS AT ALL THAT HAVE S H O W N THAT THEY HAVE SUSTAINED ANY COGNIZABLE INDEPENDENT INJURY AS REQUIRED UNDER 17 204 PROPOSITION 64 THAT WOULD SHOW THAT THEY WERE SOMEHOW DAMAGED B Y O U R DELIVERY OF CLICKS WHICH A R E ESSENTIALLY VISITORS TO THEIR SITE OVER T H E I R D A I L Y B U D G E T O N O N E DAY V E R S U S ANOTHER D A Y. A N D, YOUR HONOR, I HAVE G I V E N THIS TO COUNSEL. I JUST USE THIS AS AN ILLUSTRATION . HERE 'S -- THIS W O U L D B E A N EXAMPLE OF A $1 0 D A I L Y BUDGET WITH A SEVEN D A Y BILLING PERIOD, JUST TO KEEP T H I N G S SIMPLE . PLAINTIFFS ACKNOWLEDGE , A N D THE COURT H A S AGREED, THAT THEY WOULD AGREE THAT THEY WOULD TAKE $1 0 O F CLICKS, $1 0 W O R T H O F V I S I T O R S T O T H E I R SITE ON A N Y G I V E N D A Y AND THEY WOULD AGREE THAT A S LONG AS WE G O T T O $ 10 THEY W O U L D P A Y THAT A M O U N T. THE 4 S O W E HAVE SET FORTH OUR THAT 'S U.S. COURT REPORTERS 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 TOTAL IS $7 0 W O R T H O F C L I C K S. WHAT WE DO A N D WHAT WE TELL THE PLAINTIFFS WE DO AND WHAT THE CONTRACT SAYS WE CAN DO IS BECAUSE WE CAN 'T GUARANTEE THAT YOU 'RE GOING TO G E T V I S I T O R S O N YOUR SITE THROUGH YOUR ADVERTISEMENTS ON A SPECIFIC DAY , THAT WE WILL AVERAGE OUT THAT AMOUNT SUCH THAT W E'L L TAKE Y O U U P TO ABOVE 1 2 0 PERCENT OF YOUR DAILY BUDGET ON A GIVEN D A Y. S O, FOR EXAMPLE, HERE IF THEY G O T $8 WORTH OF C L I C K S, WE TELL THEM THAT WE CAN TAKE THEM UP TO $1 2 W O R T H O F C L I C K S THE NEXT DAY OR $8 , $ 12, ET C E T E R A. A N D, YOUR HONOR, WHAT THE PLAINTIFFS HAVE N O T DONE , THEY HAVE NOT SHOWN , DESPITE THERE W A S A N INVITATION IN FOOTNOTE 8 T O YOUR HONOR 'S PRIOR R U L I N G O N M A Y 14T H, 200 8 W H E R E Y O U SAID I F THEY HAVE OVERCAPACITY PROBLEMS OR IF SOMEHOW THEY C A N' T MAKE USE OF THOSE C L I C K S, THAT C O U L D B E A COGNIZABLE INJURY . THAT THEY HAVE NOT DONE THAT. THEY HAVE NOT INTRODUCED ANY EVIDENCE WHATS OEVER THAT G I V E N T H E S E E X T R A C L I C K S ON A TUESDAY SOMEHOW C A U S E D THEM A N Y DAMAGE INSTEAD OF GETTING THOSE CLICKS ON A MONDAY . WHATSOEVER. 5 NO EVIDENCE U.S. COURT REPORTERS 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 THEY HAVE PUT FORTH NOTHING THAT W O U L D SUGGEST THAT THESE EXTRA CLICKS WERE SOMEHOW LESS VALUABLE THAN THE C L I C K S THAT THEY RECEIVED ON AN EARLIER DAY . THEY SUBMITTED NO EVIDENCE THAT THEY NO DIDN' T A C T U A L L Y RECEIVE VISITORS TO T H E SITE . EVIDENCE , YOUR HONOR , NONE WHATSOEVER THAT SUGGESTS THAT THEY DIDN 'T ACTUALLY GET BENEFITS FROM THOSE C L I C K S BECAUSE THEY GOT VISITORS TO T H E SITE . S O THIS IS WHAT THEY HAVE DONE. THEY HAVE NOT ALLEGED THAT T H E R E H A S BEEN A N Y DAMAGE . AN EXAMPLE WOULD BE SUPPOSE I T'S 11 :59 P. M. ON A M O N D A Y, THEY G E T $8 WORTH OF CLICKS . 12 :01 THEY GET $2 WORTH OF C L I C K S. TUESDAY, THEY HAVEN' T SHOWN ANY DAMAGE FROM THAT BASICALLY SPREADING THOSE CLICKS OVER TIME WHATSOEVER. INSTEAD , YOUR HONOR , WHAT THE PLAINTIFFS HAVE SAID I S THAT THEY BASICALLY SAID THIS I S WHAT THEY WANT BECAUSE THEY WANT T O NEVER G O OVER THEIR DAILY B U DG E T. B U T T H E TRUTH IS, YOUR HONOR, IS THAT THIS I S, IN FACT, WHAT PLAINTIFF STERN TESTIFIED I S THAT WHAT PLAINTIFFS WANT IS THIS: THEY WANT T H E EXTRA CLICKS , THEY TAKE THE EXTRA C L I C K S, THEY BENEFIT FROM THE EXTRA C L I C K S, BUT WHAT THEY WANT TO DO IS ESSENTIALLY G E T SOMETHING F O R NOTHING A N D THEY WANT TO PAY F O R THIS T H E L O W E R 6 U.S. COURT REPORTERS 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 AMOUNT. A N D THAT 'S WHAT THEY 'RE T R Y I N G T O D O I N THE LAWSUIT . A N D, YOUR HONOR, UNDER PROPOSITION 64 THEY HAVE T O HAVE SOME KIND O F A N INDEPENDENT I N J U R Y, AND THEY HAVE N O T ALLEGED A N Y. A G A I N, THE COURT INVITED THEM. T H E COURT: L E T ME SLOW Y O U DOWN. SURE . M R. BIDERMAN: T H E COURT: A S T O THE ORANGE HYPOTHETICAL L E T'S A S S U M E THAT IT IS WHAT THE PLAINTIFFS WANT, WHAT IS THE DIFFERENCE IN THE BILLING BETWEEN T H E WHAT LOOKS LIKE P U R P L E, OR IS THAT BLACK? TELL. M R. BIDERMAN: T H E COURT: I T'S BLUE, YOUR HONOR. I C A N'T WHAT IS T H E DIFFERENCE BETWEEN THE BLUE HYPOTHETICAL A N D T H E ORANGE HYPOTHETICAL WITH RESPECT TO WHAT I S B I L L E D? M R. BIDERMAN: THIS IS A HYPOTHETICAL B U T IN THIS EXAMPLE I T W O U L D B E 6 5 BECAUSE IT WOULD NEVER GO OVER THEIR DAILY BUDGET . A N D THE POINT IS , YOUR HONOR -T H E COURT: THE BLUE HYPOTHETICAL? M R. BIDERMAN: ACTUALLY DO , YOUR HONOR . 7 BECAUSE BLUE IS WHAT W E W H Y ARE THEY BILLED MORE IN U.S. COURT REPORTERS 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 MORE? BUDGET? T H E COURT: I KNOW. B U T WHY DO THEY BILL W H Y ARE THEY BILLED IN E X C E S S O F T H E I R D A I L Y M R. BIDERMAN: BECAUSE AS T H E C O U R T H A S RULED , W E'R E ALLOWED TO TAKE THEM U P T O 2 0 PERCENT ABOVE THEIR DAILY BUDGET O N A GIVEN D A Y. WILL LOOK A T THIS . $7 0. SO WE THEY HAVE A G R E E D THEY WILL PAY THEY HAVE $ 70 WORTH OF CLICKS HERE, A N D THEY THEY G O T THE $7 0 HAVE $70 WORTH OF C L I C K S HERE . WORTH OF C L I C K S. THEY GOT T H E BENEFIT . T H E ONLY BENEFIT IS THAT THE C L I C K S WERE N O T S P R E A D OUT , B U T WE CAN 'T SPREAD THEM OUT BECAUSE WE CAN 'T CONTROL WHETHER SOMEBODY IS GOING TO VISIT THEIR SITE. T H E COURT: IS POSSIBLE . M R. BIDERMAN: YOUR HONOR , THE ORANGE B U T THE O R A N G E HYPOTHETICAL HYPOTHETICAL I S P O S S I B L E T O D O, BUT THAT' S N O T THE W A Y W E D O I T. IT 'S NOT T H E W A Y WE ARRANGE T O D O IT , A N D IT' S N O T THE W A Y T H E AGREEMENT PROVIDES . A N D OUR POINT HERE, F O R P U R P O S E S O F THIS M O T I O N, IS THAT I F THEY 'RE TO S A Y THAT T H E O R A N G E HYPOTHETICAL I S WHAT THEY WANT, THEY HAVE TO SHOW UNDER PROPOSITION 64 TH A T THEY WERE SOMEHOW INJURED BY RECEIVING T H E S E C L I C K S ON A TUESDAY R A T H E R THAN 8 U.S. COURT REPORTERS 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 A MONDAY . I N O T H E R W O R D S, THEY HAVE G O T T O S A Y, IT 'S -- PROPOSITION 64 SAYS, ONE , THEY HAVE TO SHOW AN I N J U R Y A N D IN FACT; AND , T W O, THAT THEY LOST MONEY OR PROPERTY . A N I N J U R Y IN FACT M E A N S SOMETHING THAT I S A COGNIZABLE INJURY. I T'S N O T JUST A CLAIM WHICH THEY SET FORTH IS THAT WE DIDN'T WANT THOSE CLICKS . THAT' S N O T ENOUGH . THAT COULD B E A CONTRACTUAL R E M E D Y, BUT AS T H E C O U R T SUGGESTED IN FOOTNOTE A, THEY COULD COME F O R T H A N D TRY TO S A Y, YOU KNOW, G E E, WE COULDN 'T ACCEPT THESE EXTRA C L I C K S THAT D A Y. T H E V I S I T O R S W E R E N'T AS GOOD. THEY HAVE CAPACITY PROBLEMS . WE COULDN 'T SHIP THAT D A Y. THEY HAVEN' T P U T FORTH ANY EVIDENCE OF THAT. I N FACT , YOUR HONOR , THE EVIDENCE THAT THEY PUT FORTH IS WHEN THEY D I D HAVE C A P A C I T Y PROBLEMS , THEY WOULD PAUSE AND THEY WOULD JUST SHUT DOWN THE SITE ENTIRELY AND PAUSING IS STILL PART O F THE CASE BUT NOT PART O F THIS MOTION. T H E COURT: WELL , PART OF WHAT I HAVE TO KEEP TRACK OF AS I L I S T E N TO BOTH O F Y O U TODAY, A N D I' LL GIVE Y O U A M O M E N T TO RESPOND, IS THAT THIS IS A MOTION THAT CHALLENGES T H E STANDING OF THE CLAIMS. 9 U.S. COURT REPORTERS 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 M R. BIDERMAN: T H E COURT: EXACTLY . I T I S N O T A MOTION WHERE I'M N O W ADJUDICATING WHETHER O R N O T THERE IS A R E M E D Y THAT SHOULD BE AWARDED AT THE E N D O F T H E EVIDENCE IN T H E CASE . A N D SO THE QUESTION OF STANDING IS , I S THERE A COGNIZABLE CLAIM UNDER CALIFORNIA LAW WHICH REQUIRES INJURY? A S LONG AS IT APPEARS TO THE COURT THAT WHAT GOOGLE CALLS A DAILY BUDGET IS R E A L L Y A PERIODIC B U D G E T A N D NOT A DAILY BUDGET , I T S E E M S T O ME THAT I HAVE TO AT LEAST THEORETICALLY FIND THAT THERE IS A CLAIM THAT C A N BE STATED , WHETHER OR N O T THERE A R E P E O P L E OUT THERE W H O F I T THAT C A T E G O R Y I S A DIFFERENT M A T T E R, BUT A CLAIM CAN BE S T A T E D BECAUSE ONE W H O S I G N S U P F O R A D A I L Y B U D G E T IS DIFFERENT THAN O N E W H O SIGNS UP FOR A MONTHLY BUDGET O R A PERIODIC BUDGET. A N D ALTHOUGH I A G R E E WITH Y O U THAT IN T H E WORLD OF ELECTRONIC ADVERTISING IT WOULD BE SURPRISING THAT T H E R E A R E INDIVIDUALS WHO WOULD COMPLAIN ABOUT RECEIVING MORE ADVERTISING THAN THEY BUDGETED AS LONG AS THEY A R E BILLED T H E SAME . O N A DAILY BASIS , THEY A R E I N D E E D NOT ONLY RECEIVING MORE THAN THEY BUDGETED BUT THEY ARE 10 U.S. COURT REPORTERS 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 BEING B I L L E D F O R MORE THAN THEY BUDGETED AND THAT IS T H E R E A S O N THAT I HAVE LEFT THIS O N E A S P E C T OF IT . I F YOU HAVE I T O N A CONTRACT BASIS , THERE IS A LIMITED G R O U P THAT I HAVE EVEN ALLOWED ON A CONTRACT BASIS B U T U N D E R 1 720 0 T H E PROBLEM I S THAT G O O G L E MAINTAINS AND CONTINUES T O M A I N T A I N THAT IT 'S PERMISSIBLE TO CHARACTERIZE THIS AS A D A I L Y BUDGET. BUT EVERY PRESENTATION I HAVE HEARD PRESENTS IT 'S A P E R I O D I C B U D G E T. M R. BIDERMAN: T H E COURT: CORRECT , YOUR HONOR . A L L RIGHT. B U T THE POINT HERE IS THAT M R. BIDERMAN: T H E PLAINTIFFS UNDER 17 200 , I T I S A STANDING M O T I O N, THEY R E A L L Y HAVE T O P R O V E SOME KIND OF AN I N J U R Y, AND UNDER RULE 56 THEY A R E SPECIFICALLY REQUIRED TO COME FORTH WITH SOME EVIDENCE OF SOME INJURY. T H E COURT HAS SUGGESTED WAYS THAT THEY COULD BE INJURED. THAT EVIDENCE. I WOULD REFER THE COURT T O THE CASE A S THAT WE CITED, T H E C E L L C O CASE W H E R E E S S E N T I A L L Y A -11 THEY HAVE NOT COME FORTH WITH U.S. COURT REPORTERS 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 DOLLARS. T H E COURT: B U T ISN 'T THAT MORE APPROPRIATELY A M O T I O N FOR SUMMARY JUDGMENT ON S A Y I N G THAT THERE IS LIABILITY B U T NO DAMAGES? I MEAN, IF Y O U B R I N G I T A S A STANDING ISSUE , I TAKE A DIFFERENT LOOK A T I T THAN I DO IF Y O U'R E B R I N G I N G I T A S A M O T I O N W H E R E I 'M TRYING TO ADJUDICATE THE CASE. M R. BIDERMAN: ADJUDICATE THE CASE. W E'R E N O T ASKING Y O U T O W E'R E JUST SAYING THAT THEY HAVE TO ALLEGE A N D P R O V E A N I N J U R Y TO HAVE S T A N D I N G UNDER PROPOSITION 64 . THEY D O N' T HAVE STANDING UNDER PROPOSITION 64 BECAUSE THEY HAVE N O T S E T FORTH AS REQUIRED UNDER RULE 56( E)( 2) SPECIFIC FACTS SHOWING THAT, IN FACT, THEY WERE INJURED. T H E COURT: B U T IF THEY B U D G E T $10 A N D I KNOW THAT THIS COULD BE A THOUSAND DOLLARS. M R. BIDERMAN: T H E COURT: SURE . ABSOLUTELY. O R A HUNDRED THOUSAND B U T IF THEY B U D G E T $10 A N D Y O U ADMIT THAT ON A GIVEN DAY THAT THEY B U D G E T $10 , THEY WILL BE CHARGED MORE THAN $1 0, THEN THEY HAVE STATED AN INJURY. T H E VERY FACT THAT YOU WILL CHARGE THEM MORE -- IN OTHER WORDS, W H Y S H O U L D GOOGLE BE T H E ONE T O DETERMINE THAT O N THE SECOND DAY THEY REALLY 12 U.S. COURT REPORTERS 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 OUGHT TO E X C E E D T H E I R B U D G E T? M R. BIDERMAN: YOUR HONOR , O N E, BECAUSE YOUR HONOR HAS RULED THAT WE CAN AS A MATTER OF CONTRACT . T H E COURT: CONTRACT . M R. BIDERMAN: UNDERSTAND. I UNDERSTAND. I R I G H T, BUT I' M N O T TALKING B U T, T W O, I R E A L L Y THINK THE L A W I S THEY HAVE TO COME FAIRLY C L E A R U N D E R PROP 64 . FORWARD WITH SOMETHING THAT SAYS THAT I WAS HURT B Y THOSE EXTRA $2 ON TUESDAY, A N D THEY HAVEN 'T DONE THAT, YOUR HONOR. B U T WE REQUEST THAT T H E C O U R T CONSIDER THAT, LOOKING AT THE PROP 64 CASE THAT WE CITED , CELLCO, CHAVEZ. T H E COURT: TIME. M R. BIDERMAN: T H E COURT: SURE . L E T ME TRY THIS ONE MORE W H Y IS IT NECESSARY TO S A Y MORE THAN THE FACT THAT I HAVE BEEN CHARGED MORE THAN I BUDGETED? TO BE HURT MEANS TO BE -- I S E T A B U D G E T A N D THAT'S SOMETHING I WANT TO MAINTAIN AND T H E REPRESENTATION I S MADE THAT I C A N SET IT ON A DAILY BASIS , I N D E E D I C A N CHANGE IT D U R I N G T H E C O U R S E O F T H E DAY . M R. BIDERMAN: SURE . 13 U.S. COURT REPORTERS 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 BASIS . T H E COURT: B U T I C A N SET IT ON A DAILY A N D THE ADMISSION O N T H E PART O F G O O G L E IS THAT WE WILL N O T HONOR THAT B U D G E T. C H A R G E Y O U MORE THAN ON T H E D A Y. M R. BIDERMAN: T H E COURT: A N D WE TELL THEM . W E WILL W H Y ISN 'T THAT P R O O F O F HARM ? BECAUSE JUST SAYING THAT M R. BIDERMAN: Y O U DIDN 'T WANT T H O S E C L I C K S AND Y O U DIDN 'T WANT THOSE VISITORS I S N'T PROOF OF HARM JUST A S I N C H A V E Z T H E PLAINTIFF SAID, "I THOUGHT THE SOFT D R I N K S WERE MADE IN SANTE FE. I DIDN' T WANT THEM AND T H E C O U R T BECAUSE THEY WERE MADE IN SANTE FE. " SAID, "YEAH , B U T THE SOFT DRINKS A R E JUST AS VALUABLE EVEN THOUGH THEY' RE MADE I N CALIFORNIA ." HERE , WHAT IT S H O U L D HAVE DONE AND WHAT THEY COULD HAVE DONE A N D SAID , L I S T E N, ON THIS SECOND DAY I JUST HAD TOO MANY VISITORS T O M Y SITE . I COULDN 'T ACCEPT THOSE CLICKS. WEREN 'T VALUABLE TO ME. THOSE CLICKS I COULDN'T SHIP. SOMETHING S P E C I F I C THAT SAYS, OR THESE VISITORS JUST WEREN' T A S VALUABLE. SOMETHING THAT SAYS AND T H E C O U R T R E F E R R E D T O THAT IN FOOTNOTE 8. BASICALLY T H E COURT SAID, IF THERE' S A PROBLEM WITH CAPACITY , A N D I C A N' T U S E THOSE CLICKS , FINE . 14 U.S. COURT REPORTERS 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 HONOR . B U T ONCE W E - - YOUR HONOR , T H E BURDEN IS ON THEM TO PROVE STANDING, A N D THEY HAVE TO COME FORTH WITH MORE THAN JUST A BALD STATEMENT THAT THEY DIDN'T WANT THOSE CLICKS . T H E COURT: L E T ME TURN T O YOUR OPPONENT A N D SAVE T H E REST OF YOUR TIME F O R REBUTTAL. M R. BIDERMAN: T H E COURT: OF YOUR CHART THERE? M R. BIDERMAN: T H E COURT: I DO . T H A N K Y O U. D O YOU HAVE A SMALL VERSION T H A N K Y O U. L E T ME APPROACH, YOUR M R. BIDERMAN: T H E COURT: M R. SUSMAN : M R. SUSMAN . THANK YOU , YOUR HONOR . YOUR HONOR , GOOGLE' S THIRD I N A N APPARENTLY NEVER ENDING SUCCESSFUL PARTIAL SUMMARY JUDGMENT MOTION SERIES IS AN ATTEMPT TO MAKE I T IMPOSSIBLE TO CERTIFY ANY CLASS OR TO SO LIMIT T H E C L A I M S OF THE NAMED PLAINTIFFS THAT G O O G L E WILL B E ABLE TO S E T U P T H E ARGUMENT THAT THEY LACK T H E ABILITY TO REPRESENT THE CLASS EVEN THOUGH THEY HAVE SIMILAR CLAIMS, THEY' RE NOT IDENTICAL C L A I M S. F O R THE PURPOSE OF THE UC L A N D FAL C L A I M S, PLAINTIFFS HAVE SUFFERED I N J U R Y, IN FACT, 15 U.S. COURT REPORTERS 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 YOUR HONOR, BECAUSE THEY HAVE LOST MONEY. THEY WERE CHARGED A N D PAID F O R CLICKS THAT THEY D I D NOT SEEK, E X P E C T, OR REQUEST. G O O G L E' S C L A I M THAT THIS IS NOT E N O U G H I S BASED NOT O N FOOTNOTE 8 BUT FOOTNOTE 1 0 O F THE COURT 'S OPINION I N DENYING GOOGLE'S SECOND MOTION FOR SUMMARY JUDGMENT . T H E COURT IN THAT SAID THREE T H I N G S: FIRST WHETHER THERE WAS A N ACTUAL INJURY IS N O T D I R E C T L Y A T I S S U E I N T H E PARTIES' BRIEFS ; S E C O N D, T H E C O U R T SAID THAT THERE ARE TRIABLE ISSUES OF FACT AS TO WHETHER A CUSTOMER WOULD SUFFER ACTUAL INJURY ; T H I R D, THE COURT SAID AN EXAMPLE O F A C T U A L I N J U R Y MIGHT BE OVEREXPOSURE ON CERTAIN DAYS WHICH WOULD C R E A T E DIFFICULTIES IN MEETING D E M A N D AND MAINTAINING CUSTOMER SATISFACTION. G O O G L E RELIES ON T H E N O T DIRECTLY AT ISSUE DISCLAIMER TO AVOID THE TRIABLE ISSUE OF FACT CONCLUSION. Y E T IT CEASES UPON THE EXAMPLE TO SUGGEST THAT WITHOUT EVIDENCE OF DIFFICULTIES C A U S E D B Y OVER EXPOSURE THE PLAINTIFFS HAVE N O T BEEN INJURED SIMPLY BY H A V I N G BEEN B I L L E D A N D PAID F O R SOMETHING THAT THEY DID N O T REQUEST OR WANT. N O W, T H E PLAINTIFFS , W E A R E UPSET WITH 16 U.S. COURT REPORTERS 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 H A V I N G T O RESPOND TO SUCCESSIVE MOTIONS F O R SUMMARY JUDGMENT ON I S S U E S THAT COULD HAVE BEEN R A I S E D PREVIOUSLY, B U T I WANT TO GO TO THE M E R I T S O F T H E I R LACK OF INJURY A N D FACT ARGUMENT BECAUSE, FRANKLY, I AGREE THAT I T H A D BEEN F U L L Y BRIEFED IN T H E PARTIES' BRIEF . I D O N' T T H I N K T H E PARTIES INTENDED I T S EXAMPLE IN FOOTNOTE 10 TO BE AN EXCLUSIVE TYPE OF I N J U R Y. THROUGHOUT I T S B R I E F I N SUPPORT OF I T S MOTION FOR THIRD SUMMARY JUDGMENT, GOOGLE CLAIMS THAT IT IS SOMEHOW R E L E V A N T THAT , Q U O T E, "PLAINTIFFS PAID NO MORE THAN THEY AGREED TO P A Y A N D THAT PLAINTIFFS RECEIVE," QUOTE , " THE BENEFIT OF THEIR BARGAIN. " THIS IS A RED HERRING BECAUSE F O R PURPOSES OF T H E U CL AND FA L C L A I M S IS NOT WHETHER PLAINTIFFS PAID MORE THAN THEY A G R E E D TO PAY B U T RATHER WHETHER THEY PAID MORE THAN ORDINARY ADVERTISERS WOULD HAVE REASONABLY EXPECTED T O P A Y. I F T H E BENEFIT O F T H E BARGAIN W A S NOT SO PROMINENT THAT A REASONABLE CONSUMER WOULD NECESSARILY S E E I T, IF IT WAS H I D D E N W I T H I N AN ADWORDS AGREEMENT OF OVER A HUNDRED PAGES IN L E N G T H, THEN, AS THIS C O U R T H A S PREVIOUSLY HELD , PLAINTIFFS HAVE A U C L, FAL CLAIM , A N D THOSE CLAIMS 17 U.S. COURT REPORTERS 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 ARE BASED O N GOOGLE' S STATEMENTS ABOUT CUSTOMERS CONTROL OVER THEIR DAILY BUDGET. A N D I'M QUOTING THE COURT N O W, QUOTE, "I M P L Y I N G I F N O T OUTRIGHT AFFIRMING THAT THE DAILY BUDGET I S THE MAXIMUM CHARGE CUSTOMERS WILL INCUR ON A N Y G I V E N D A Y, " C L O S E D QUOTE. T O A R G U E THAT ADVERTISERS S H O U L D HAVE NO RIGHT TO COMPLAIN ABOUT H A V I N G T O P A Y FOR C L I C K S THAT THEY D I D NOT SEEK, REQUEST, OR E X P E C T I S LIKE ARGUING, YOUR HONOR, IF Y O U TAKE YOUR CAR TO A CAR WASH AND THEY OFFER YOU A L L O F T H E S E S E R V I C E S, THIS MENU OF SERVICES, A N D Y O U SAY , " I JUST WANT THE BASIC WASH. " A N D THE C A R GOES THROUGH THE C A R WASH A N D INSTEAD OF WASHING YOUR C A R THEY ALSO APPLY WAX TO IT . AND THEY SUBMIT TO Y O U A L A R G E R BILL THEN YOU ARE YOU PROHIBITED - - D O EXPECTED OR REQUESTED. YOU NOT HAVE STANDING T O COMPLAIN THAT YOU ARE BEING B I L L E D, IN FACT, IF YOU PAID THE BILL, N O T REALIZING THAT Y O U WERE BEING CHARGED, WOULDN'T Y O U HAVE STANDING TO COMPLAIN THAT Y O U ARE GETTING -Y O U A R E HAVING TO P A Y F O R SOMETHING THAT YOU DIDN' T WANT, Y O U DIDN 'T REQUEST, AND Y O U DIDN 'T SEEK? THEY -- THAT' S S T A N D I N G A N D IT' S N O T AN A N S W E R F O R THEM T O S A Y, WELL, T H E W A X JOB DIDN' T 18 U.S. COURT REPORTERS 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 HURT YOUR C A R. WELL , A C T U A L L Y T H E WAX J O B W A S GOOD F O R YOUR CAR . SO WHY A R E Y O U COMPLAINING? I D O N'T CARE WHETHER I T W A S GOOD F O R MY C A R O R N O T. I D O N'T CARE WHETHER I T H E L P E D OR NOT . I SHOULDN' T HAVE TO P A Y F O R IT. I DIDN'T WANT IT. G O O G L E SAYS, AND WE AGREE , THAT A PLAINTIFF CANNOT ESTABLISH INJURY O R STANDING T O S U E U N D E R T H E UCL S I M P L Y B Y SHOWING THAT THE DEFENDANT COMMITTED A DECEPTIVE PRACTICE. B U T THE NAMED PLAINTIFFS IN THIS CASE SHOW THAT THEY , I N ADDITION, WERE DECEIVED T O PAY EXTRA F O R SOMETHING THAT THEY D I D N O T WANT. G O O G L E SAYS, AND WE AGREE , THAT PROPOSITION 64 WOULD BE MEANINGLESS IF MERE PROOF OF A VIOLATION WERE ENOUGH TO ESTABLISH I N J U R Y AND FACT AND STANDING TO S U E. B U T THIS IS N O T T H E SITUATION DESCRIBED IN THE LEGISLATIVE HISTORY OF PROPOSITION 64 WHERE , Q U O T E, "PRIVATE ATTORNEYS A R E FILING LAWSUITS FOR COMPETITION, WHERE THEY HAVE N O C L I E N T W H O HAS BEEN INJURED, IN FACT, UNDER THE STANDING REQUIREMENTS O F THE UNITED STATES CONSTITUTION," CLOSED Q U O T E. N O R IS THIS LIKE T H E BUCK LAND CASE THAT THEY RELY O N I N THEIR BRIEFS, WHERE A PLAINTIFF , A 19 U.S. COURT REPORTERS 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 CONSUMER ADVOCATE SUSPECTED THE PLAINTIFFS' MARKETING A N D PACKAGING W A S M I SLEADING A N D BOUGHT THEIR PRODUCT SOLELY TO P U R S U E - - T O FILE A LAWSUIT COMPLAINING ABOUT IT . CLRB HANSON INDUSTRIES AND HOWARD STERN MEET THE DUAL REQUIREMENTS OF PROPOSITION 64 . A R E T W O. F I R S T, THEY HAVE STANDING UNDER T H E UNITED STATES CONSTITUTION BECAUSE THEY SUFFERED. THE BUCK LAND CASE AGAIN , AND MANY FEDERAL CASES , QUOTE , " AN INVASION OF A LEGALLY PROTECTED I N T E R E S T WHICH IS , A , C O N C R E T E A N D PARTICULARIZED; A N D, B, A C T U A L O R EMINENT OR N O T C O N J E C T U R A L O R HYPOTHETICAL. S E C O N D, THEY MEET T H E SECOND PRONG OF PROPOSITION 14 BECAUSE THEY LOST MONEY AS A RESULT OF H A V I N G BEEN B I L L E D A N D HAVING PAID FOR SOMETHING THAT THEY D I D NOT ORDER . G O O G L E SAYS THAT IT IS SOMEHOW MATERIAL THAT PLAINTIFFS WERE HAPPY TO RECEIVE CLICKS IN EXCESS O F THEIR DAILY BUDGET, BUT JUST BECAUSE Y O U'R E H A P P Y T O RECEIVE SOMETHING Y O U DIDN'T ORDER LIKE A W A X JOB DOESN 'T MEAN THAT Y O U LOSE A N Y STANDING TO COMPLAIN ABOUT H A V I N G T O P A Y FOR IT . G O O G L E PROTESTS IT' S N O T FAIR THAT 20 THEY U.S. COURT REPORTERS 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 PLAINTIFFS SHOULD G E T A WINDFALL OF FREE CLICKS A N D TO RESPOND TO THAT W E C I T E D I N O U R BRIEF THE IDEA THAT YOU C A N N O T C O M P L A I N A B O U T SOMEONE N O T P A Y I N G F O R SOMETHING THAT Y O U GAVE THEM B U T THEY DIDN' T REQUEST. L E T ME GO -- SO THAT'S O U R S T A N D I N G POINT , YOUR HONOR , W E MEET PROPOSITION 64 . AND HE C A N TALK ABOUT PROPOSITION 64 A N D I S TALKING ABOUT T H E A T T O R N E Y GENERAL , M Y B R I N G I N G A CASE FOR SOMEONE WHO H A S N O C L A I M A T A L L. THAT 'S NOT THIS CASE AND IT 'S NOT T H E BUCK LAND CASE E I T H E R. N O W, L E T M E G O T O T H E I R SECOND POINT WHICH HE H A S N O T ADDRESSED WHICH IS IN H I S B R I E F S BECAUSE I WANT TO DEAL WITH THAT . GOOGLE CONCEDES THAT THE NAMED PLAINTIFFS HAVE STANDING FOR OVERCHARGES THAT THEY WERE B I L L E D A N D PAID B E F O R E THEY LEARNED ABOUT HOW T H E 1 20 PERCENT RULE OPERATED. S O G O O G L E BACKS OFF T H E C L A I M I T MADE IN ITS OPENING BRIEF THAT PLAINTIFFS LACK STANDING AND N O W W A N T S T H E COURT TO ACCEPT T H E D A T E S O F OCTOBER 21 , 2 003 F O R S T E R N A N D THE S E C O N D QUARTER OF 20 04 F O R H A N S O N AS BEING THE DATES WHEN THEY A C Q U I R E D KNOWLEDGE A N D WHEN T H E I R C L A I M S H O U L D BE CUT O F F. B U T THE QUESTION IS , YOUR HONOR , 21 U.S. COURT REPORTERS 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 KNOWLEDGE O F WHAT ? THAT G O O G L E HAD PERIODICALLY CHARGED THEM 1 20 PERCENT O F T H E I R D A I L Y B U D G E T OR THAT GOOGLE HAD A POLICY AND PRACTICE WHEREAS G O O G L E C A L L S I T A RULE, 1 2 0 PERCENT RULE OF CHARGING EVERYONE 1 2 0 PERCENT OF THEIR DAILY BUDGET? T O B E SURE THE PLAINTIFFS COMPLAINED WHEN THEY LEARNED THAT THEY THOUGHT THAT THEY HAD BEEN OVERBILLED. THEY COMPLAINED AND ASKED F O R A N THAT EVIDENCE IN NO WAY EXPLANATION AND A REFUND. ESTABLISHES AS A MATTER OF L A W THAT T H E PLAINTIFFS WERE THEN A W A R E THAT G O O G L E H A D 120 PERCENT RULE THAT APPLIED T O E V E R Y O N E O R THAT THEY HAD A N Y IDEA OF H O W THAT RULE OPERATED. L E T ME GO TO THEIR FINAL POINT, YOUR HONOR . AND THIS IS I T H I N K IMPORTANT FOR CLEARING UP T H E CASE , A N D I D O WANT TO MAKE SOME C O N C E S S I O N S HERE. WITH GOOGLE'S CLARIFICATION THAT I T DOES N O T SEEK SUMMARY JUDGMENT AS TO CUSTOMERS W H O P A U S E AND THE CHANGES I N DAILY BUDGETS WITHIN A DAY HAVE NOTHING TO DO WITH T H E TWO PARTIAL MONTH SCENARIOS IDENTIFIED BY THE COURT AS G I V I N G RISE TO A BREACH OF CONTRACT CLAIM , W E CONCEDE THAT IN NO PERIOD OF TIME THAT A PARTICULAR DAILY BUDGET WAS I N EFFECT 22 U.S. COURT REPORTERS 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 AND A CAMPAIGN NOT PAUSED WERE THE NAMED PLAINTIFFS CHARGED MORE THAN THEIR PARTICULAR DAILY BUDGET MULTIPLIED BY THE N U M B E R O F DAYS IN THAT PERIOD . I N I T S OPINION DENYING GOOGLE'S FIRST M O T I O N F O R SUMMARY J U D G M E N T, THE COURT IDENTIFIED THREE GROUPS O F ADVERTISERS WHO HAVE VIABLE BREACH OF CONTRACT C L A I M S. HOWEVER , A T H I S DEPOSITION, MR. S A MM E T, A GOOGLE REPRESENTATIVE, TESTIFIED THAT GOOGLE NEVER CHARGED ANYONE IN T H E F I R S T T W O GROUPS WHERE T H E CAMPAIGNS INVOLVE NEITHER PAUSING NOR MIDDAY CHANGES IN THE DAILY B U D G E T, MORE THAN T H E D A I L Y B U D G E T T I M E S T H E NUMBER OF DAYS WHEN T H E DAILY B U D G E T W A S IN EFFECT . I N T H E RELIANCE OF THAT TESTIMONY WE HAVE TENDERED YESTERDAY T O GOOGLE A THIRD AMENDED COMPLAINT THAT REMOVES THE PARTIAL MONTH SCENARIOS AS B R E A C H O F C O N T R A C T C L A I M S. THIS CONCESSION OF REMOVING THEM DOES N O T AFFECT O U R U C L OR FAL C L A I M S, AND WE STILL A S S E R T THAT T H E E X C E S S CHARGES IN T H E D A I L Y B U D G E T WERE DECEPTIVE AND U N F A I R. T H E CONCESSION ALSO DOES NOT A F F E C T T H E NAMED PLAINTIFFS' B R E A C H O F C O N T R A C T C L A I M S FOR E I T H E R B E I N G PART OF A GROUP OF CUSTOMERS W H O P A U S E D T H E I R A D V E R T I S I N G C L A I M S OR BEING PART O F A 23 U.S. COURT REPORTERS 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 F O U R T H G R O U P THAT T H E C O U R T IDENTIFIED IN A FOOTNOTE IN I T S LAST OPINION, THAT IS, THOSE WHOM D U R I N G A CAMPAIGN G O O G L E OVER SERVED OR AS T H E C O U R T SAID FRONTL O A D E D AND THEN OVERCHARGED BEFORE THERE W A S A N Y DEFICIT T O MAKE UP . G O O G L E STATES IN I T S B R I E F THAT I T S PARTIAL MOTION H A S NOTHING TO DO WITH EITHER T H E EXPECTATIONS O R C O N T R A C T U A L R I G H T S OF THE ADVERTISERS WHO CHANGED THEIR DAILY BUDGETS DURING T H E C O U R S E OF A S I N G L E DAY . D U R I N G SAM MET 'S DEPOSITION TESTIMONY WE LEARNED, YOUR HONOR, THAT WHAT THEY DO , WHEN Y O U C H A N G E YOUR B U D G E T D U R I N G THE C O U R S E O F T H E DAY , THEY TAKE T H E HIGHEST B U D G E T IT WAS D U R I N G T H E C O U R S E O F T H E DAY . S O, FOR EXAMPLE, IN T H E F I R S T F E W HOURS OF T H E D A Y IT WAS $1 0 0. A N D THE ADVERTISER REDUCES IT , A S H E C A N, T E N T I M E S D U R I N G THE D A Y H E C A N R E D U C E U S E AMOUNT OF H I S B U D G E T. THEY STILL C A N'T APPLY T H E 1 2 0 PERCENT RULE TO T H E HIGHEST T H E D A I L Y BUDGET EVER W A S. W E C L A I M THAT THAT WAS I T S E L F A DIFFERENT B R E A C H O F C O N T R A C T THAN WE HAVE ALLEGED. IT 'S INCLUDED IN O U R T H I R D AMENDED COMPLAINT A N D, THAT IS , Y O U CAN 'T TELL A D V E R T I S E R S Y O U CAN CONTROL HOW 24 U.S. COURT REPORTERS 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 MUCH YOU SPEND IN A DAY , N O T IN A SEGMENT OF A DAY B U T Y O U CAN CONTROL HOW MUCH YOU SPEND IN A DAY BY LOWERING YOUR BUDGET THROUGH THE D A Y A T L E A S T T E N TIMES . A N D WE CLAIM THAT W H E R E THEY CONTINUED T O U S E T H E HIGHEST SEGMENT OF T H E D A Y, T H E F I R S T SEGMENT WHERE THE B U D G E T W A S LOWERED D U R I N G THE D A Y, THAT I S A CLEAR BREACH O F CONTRACT. T H E COURT: L E T ME UNDERSTAND - - I UNDERSTAND YOUR A R G U M E N T A N D MUCH O F WHAT Y O U'R E N O W TELLING ME I UNDERSTAND FROM T H E PLAINTIFFS ' POSITION , THIS THIRD AMENDED COMPLAINT , I S THAT SOMETHING THAT Y O U'R E D O I N G B Y STIPULATION? M R. SUSMAN : I HAVE GIVEN -- YOUR HONOR, IT W A S I N T H E COURSE OF GETTING READY FOR THIS THAT I TRIED TO CLEAN IT UP. YESTERDAY. I SENT IT TO THEM THEY HAVE THEY WILL - - THEY HAVE A RED LINED COPY . N O T H A D AN OPPORTUNITY TO LOOK A T I T. I' LL ASK THEM WHETHER THEY WILL CONSENT A N D IF THEY WILL NOT , W E WILL HAVE TO FILE A M O T I O N. M R. BIDERMAN: YOUR HONOR , W E G O T IT LATE W E H A V E N'T REVIEWED IT . IN T H E EVENING LAST NIGHT. T H E COURT: WELL , I W O N'T CONSIDER ANYTHING ABOUT THAT UNTIL I HAVE IT B E F O R E M E. M R. BIDERMAN: THAT 'S FAIR. 25 U.S. COURT REPORTERS 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 REBUTTAL . T H E COURT: YOU RESERVED SOME TIME FOR M R. BIDERMAN: I D I D, YOUR H O N O R. JUST ON T H E - - T H E PLAINTIFF S' CAR WASH EXAMPLE I S N' T, IN FACT, EXACTLY CORRECT BECAUSE Y O U HAVE TO REMEMBER THAT THESE PLAINTIFFS D O N' T ADVERTISE FOR MORE THAN O N E DAY . T H E CAR WASH EXAMPLE W O U L D B E I F Y O U GO THROUGH THE C A R WASH ON D A Y O N E AND Y O U D O N' T G E T YOUR DEODORIZER A N D YOU GO THROUGH THE C A R WASH ON D A Y T W O AND Y O U P A Y -- I'M SORRY . YOU GO THROUGH T H E C A R WASH O N D A Y ONE A N D Y O U SAY I AGREE I'L L TAKE THE C A R WASH A N D T H E DEODORIZER. YOU GO THROUGH THE C A R WASH ON D A Y O N E, Y O U D O N' T G E T THE DEODORIZER. Y O U GO THROUGH T H E CAR WASH ON DAY T W O, WE GIVE T H E DEODORIZER O N D A Y TWO . T H E COURT: ON D A Y O N E. A N D I W A N T E D THE DEODORIZER I T D O E S N'T WHAT IF I HAD A HOT DATE? DO ME A N Y GOOD ON D A Y T W O. M R. BIDERMAN: A N D IF THEY WANT , THAT 'S THEY T H E KIND OF EVIDENCE WE WERE LOOKING A T. DIDN' T HAVE T H E H O T DATE EVIDENCE, JUDGE. T H E COURT: I UNDERSTAND THE PROBLEM. I THOUGHT YOU A L L WERE I UNDERSTAND THE PROBLEM. GOING TO RESOLVE THIS CASE AFTER MY LAST ORDER. 26 U.S. COURT REPORTERS 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 I HAD PROMISES FROM YOU ALL THAT YOU WERE CLOSE TO RESOLVING T H E CASE, AND Y O U GAVE US O N E MORE CLARIFICATION A N D I WILL GIVE YOU CLARIFICATION ON THIS. A N D I D O BELIEVE THAT THERE IS STANDING ALLEGED, A N D I 'LL P U T I T I N WRITING SO THAT YOU HAVE IT BECAUSE I CONTINUE TO R E G A R D T H E REPRESENTATION OF A DAILY BUDGET AS A MATTER OF SUBSTANCE. A N D A L T H O U G H O U T OF THE REALITIES O F THE WORLD BILLINGS ARE DONE O N PERIODS OTHER THAN DAYS, TECHNICALLY A PERSON C A N S A Y, I ONLY WANT TO ADVERTISE O N A S I N G L E D A Y AND EACH DAY THEN BECOMES A MATTER OF A NEW CONTRACT , A N E W B U D G E T, A NEW P E R I O D F O R BILLING P U R P O S E S A N D IT SEEMS TO ME THAT AS LONG AS IT' S C A L L E D DAILY BUDGET , Y O U HAVE T O LIVE UP TO THAT WITH RESPECT TO CONSUMER EXPECTATIONS. I T W O U L D B E EASY TO C H A N G E I T T O A PERIODIC BUDGET B Y SIMPLY CALLING I T A PERIODIC B U D G E T A N D BECAUSE I THINK ON A CONTRACTU A L BASIS IT IS EXPLAINED T O B E A PERIODIC B U D G E T B U T THAT DOESN 'T END T H E STATUTORY OBLIGATION T O CONSUMERS TO TREAT IT AS YO U CALL IT WHICH IS AS A DAILY BUDGET. S O I AM INTENDING T O DENY T H E M O T I O N FOR 27 U.S. COURT REPORTERS 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 PARTIAL SUMMARY J U D G M E N T A S I T'S PHRASED ON THIS BASIS . T H E R E A R E SOME O T H E R T H I N G S IN HERE THAT WE HAVEN 'T TALKED ABOUT HERE TODAY THAT T H E COURT H A S CONSIDERED , B U T IT SEEMS TO ME THAT THIS CASE H A S LANGUISHED A LITTLE B I T B A S E D UPON THIS. I 'M HEARING THAT WE 'RE N O T A T A POINT -ARE YOU HERE TODAY FOR CASE MANAGEMENT ? M R. SUSMAN : M R. BIDERMAN: HONOR . T H E COURT: T O O. L E T ME HAVE Y O U STAND BY, YES , W E A R E, YOUR HONOR. W E HAVE O N E A T 1 0:0 0, YOUR I HAVE O N E MORE MOTION I T H I N K. M R. BIDERMAN: T H E COURT: SURE . AND THEN W E CAN TALK ABOUT A SCHEDULE OF WHAT YOU NEED TO DO NEXT ANTICIPATING THE ORDER THAT I INDICATED . M R. SUSMAN : M R. BIDERMAN: THANK YOU , YOUR HONOR . AND I WOULD JUST ASK THE COURT TO CONSIDER , BECAUSE IT WILL HELP I N ASSESSING THE CLAIMS AND RESOLUTION ENTERING THE ORDER , W H I C H I S ESSENTIALLY O U R FALLBACK POSITION WHICH IS BECAUSE THERE IS A CAUSATION ELEMENT I N 17 204 , THAT IS , T H E DAMAGES HAVE TO BE , Q U O T E, "AS A RESULT OF T H E VIOLATION" WITHOUT SAYING WHEN THEY 28 U.S. COURT REPORTERS 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 LEARNED OR WHAT I S SUFFICIENT TO CAUSE THEM TO LEARN . ONCE THEY LEARNED OF THE W A Y THAT THEY DID C H A R G E F O R OUR BILLING, I DO NOT BELIEVE THAT THEY C A N S A Y THAT T H E QUOTE- UNQUOTE, "FALSE ADVERTISING ," SOMEHOW CAUSED THEIR INJURY A N D THAT WILL HELP U S I N T E R M S O F ASSESSING THE CASE. M R. SUSMAN : I'M N O T R E A L L Y GOING TO HELP VERY MUCH, YOUR H O N O R, BECAUSE I NEVER CONTESTED THAT. I MEAN, I' M N O T GOING TO SAY -- T H E Q U E S T I O N IS WHEN WE LEARNED W E WERE BEING OVERBILLED VERSUS WHEN WE LEARNED THEY H A D A P O L I C Y O F OVER BILLING P E O P L E A N D COMPLAINING THAT I T WASN 'T GOING TO DO ANY GOOD . A T T H E LATER POINT IN TIME, WE CAN 'T CONTINUE TO BE DECEIVED A N D RECOVER F O R I T. READILY ADMIT THAT. I IT 'S NOT EVEN AN ISSUE HERE. SO Y O U D O N' T HAVE TO ENTER SOME DECLARATORY JUDGMENT ON SOMETHING THAT IS N O T EVEN AN ISSUE . THEIR PAPERS WANTED YOU T O PICK TWO DATES WHICH WERE THE DATES ESTABLISHED BY SOME DISCOVERY THUS FAR OF WHEN THEY F I R S T COMPLAINED ABOUT BEING OVERBILLED. THAT 'S NOT T H E SAME AS KNOWLEDGE O F THE 120 PERCENT RULE . A N D SO THAT W O U L D B E A P P R O P R I A T E. AND THAT' S N O T GOING TO INTERFERE WITH OUR S E T T L EMENT 29 U.S. COURT REPORTERS 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 OF T H E CASE . T H E COURT: L E T' S TALK AT T H E CASE MANAGEMENT CONFERENCE MORE ABOUT THIS. M R. SUSMAN : M R. BIDERMAN: THANK YOU . T H A N K Y O U, YOUR HONOR. ( WHEREUPON , T H E PROCEEDINGS IN THIS M A T T E R WERE CONCLUDED .) 30 U.S. COURT REPORTERS

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