In a September 21, 2015 opinion, Pulaski & Middleman v. Google, the US Court of Appeals for the Ninth Circuit held that damages calculations alone cannot defeat class certification (No. 12-16752, (9th Cir. Sept. 21, 2015)). The court held that its precedent in Yokoyama v. Midland National Life Ins. Co. (594 F.3d 1087 (9th Cir. 2010)) controlled, and further held that the plaintiff's proposed method of calculating restitution was not "arbitrary" under Comcast Corp. v. Behrend (133 S. Ct. 1426 (2013)).

The putative class in this class action alleged that Google violated California's Unfair Competition Law (UCL) and Fair Advertising Law (FAL) in its pricing on certain online advertisements between 2004 and 2008. They sought the equitable remedy of restitution, and proposed three ways to calculate restitution, all of which were based on a "but for" or "out of pocket loss" calculation.

The district court denied class certification. It held that with respect to the claim for restitution, common questions did not predominate over questions affecting individual members. Determining which class members were entitled to restitution, and the amount to which they were entitled, were individual inquiries that permeated the class claims. The plaintiffs appealed, arguing that the court's precedent in Yokoyama, which held that damages calculations alone cannot defeat class certification, should control.

The Ninth Circuit overturned the district court's opinion, holding that Yokoyama controlled. The court held that under both California's UCL and FAL, entitlement to restitution is a separate inquiry from the amount of restitution owed. The court also recognized that under both laws, restitution is available on a class-wide basis once the class representative makes a threshold showing of liability under either statute. The court explained that Comcast stands for the proposition that plaintiffs must be able to show that their damages stemmed from the defendant's actions which created the legal liability, and pointed to subsequent Ninth Circuit law holding that a class action could continue when damages could be efficiently calculated once the common liability questions were adjudicated.

In addition, the Ninth Circuit rejected Google's argument that the plaintiff's proposed method for calculating restitution was "arbitrary" under the standard set forth in Comcast. The court found that, because restitution under both the UCL and FAL is based on what a purchaser would have paid at the time of purchase had the purchaser received all pertinent information, the plaintiff's proposed method for calculating restitution was not "arbitrary." The court proceeded to reverse the district court's decision and remand the matter.

Practitioners in the Ninth Circuit should realize that Yokoyama is still controlling law in similar circumstances, and that damages calculations alone cannot defeat class certification.