Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 1 of 17
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`DZ RESERVE, et al.,
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`Plaintiffs,
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`v.
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`META PLATFORMS, INC.,
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`Defendant.
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`Case No. 3:18-cv-04978-JD
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`ORDER RE MOTION TO CERTIFY
`CLASS AND DAUBERT MOTIONS
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`Re: Dkt. Nos. 282, 285, 286
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`In this action alleging fraud against Meta Platforms, Inc. (Meta), formerly known as
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`Facebook, named plaintiffs DZ Reserve and Cain Maxwell have asked to certify a class of United
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`States residents who paid Meta for placement of advertisements on social media platforms. Dkt.
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`No. 282. The gravamen of the lawsuit is that Meta inflated its potential advertising reach to
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`consumers, and charged artificially high premiums for ad placements. Meta opposes certification,
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`and filed two Daubert motions challenging the opinions and conclusions proffered by plaintiffs’
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`expert witnesses. Dkt. Nos. 285, 286.
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`Three claims alleged in the Third Amended Complaint (TAC) remain in play. Dkt. No.
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`332.1 The Court dismissed with prejudice plaintiffs’ claims for breach of the implied covenant of
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`good faith and fair dealing and a quasi-contract claim. Dkt. No. 255 at 2. The Court sustained
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`plaintiffs’ claims for fraudulent misrepresentation and fraudulent concealment, with the proviso
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`that plaintiffs could not pursue those claims for conduct before August 15, 2015. Id. at 1-2.
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`While the certification motion was pending, the Court granted a motion for judgment on the
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`1 The TAC was originally filed under seal as Dkt. No. 166. The Court denied the administrative
`motion to seal the TAC without prejudice, see Dkt. No. 320, and the TAC was refiled as Dkt. No.
`332.
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 2 of 17
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`pleadings and dismissed plaintiffs’ claim of restitution under the California Unfair Competition
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`Law (UCL). Dkt. No. 366. The UCL claim was sustained for injunctive relief only. Id. at 2.
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`Consequently, the claims subject to certification are fraudulent misrepresentation and fraudulent
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`concealment for damages, and the UCL for injunctive relief.
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`DISCUSSION
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`I.
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`BACKRGOUND
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`Before getting into the merits, a few words about Meta’s brief are in order. Meta fired a
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`blunderbuss of objections at certification. Virtually every page of its lengthy opposition brief
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`presented a new argument, often in just a paragraph or two of discussion. As a result, many of its
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`arguments were underdeveloped to the point where the Court had ample justification to disregard
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`them. Even so, the Court undertook the burden of sorting through Meta’s brief to identify and
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`address what appear to be its main arguments. Meta aggravated this situation further by making
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`factual arguments much more suited to summary judgment proceedings than a class certification
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`motion. To be sure, as the ensuing certification standards make clear, the Court will review the
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`evidence as pertinent to the question of whether a class should certified. Meta’s arguments went
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`far beyond that inquiry.
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`The parties’ familiarity with the record is assumed. In pertinent part, the undisputed facts
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`are that Meta sells advertising to businesses and business owners like plaintiffs DZ Reserve and
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`Cain Maxwell. Dkt. No. 332 at ¶ 2 Meta’s Ads Manager platform is used by advertisers to
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`identify their advertising targets, including the demographic reach they desire. Id. at ¶ 3. After
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`advertisers select their targeting and placement criteria, the Ads Manager displays a “Potential
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`Reach” for the advertisement. See Dkt. No. 282-3. The Potential Reach is expressed as a number
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`of people that the ad may reach. Id. The default Potential Reach number, before any targeting
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`criteria are selected, is the Potential Reach for people in the United States aged 18 and up, which
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`was shown during the putative class period to be over 200 million people. Dkt. No. 281-9 at
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`¶¶ 55-60. As targeting criteria are selected, the Potential Reach is revised accordingly. Dkt. No.
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`282-3; 281-13 at 54:21-59:25. Meta describes the Potential Reach as an estimate of people in the
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`ad’s target audience. See Dkt. No. 296-17 at 3.
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 3 of 17
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`II.
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`CLASS CERFITICATION STANDARDS
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`Plaintiffs propose to certify this class under Federal Rules of Civil Procedure 23(a),
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`23(b)(2), and 23(b)(3):
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`All United States residents (including natural persons and
`incorporated entities) who, from August 15, 2014, to the present
`(“Class Period”), paid for the placement of at least one advertisement
`on Facebook’s platforms, including the Facebook and Instagram
`platforms, which was purchased through Facebook’s Ads Manager or
`Power Editor.
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`Excluded from the class are: (1) advertisements purchased pursuant
`to agreements other than Facebook’s Terms of Service or Statement
`of Rights and Responsibilities; (2) advertisements purchased using
`only non-lookalike Custom Audiences as the targeting criteria; (3)
`advertisements purchased using Reach and Frequency buying; (4)
`advertisements purchased with the objectives of canvas app
`engagement, canvas app installs, offer claims, event responses, page
`likes, or external; and (5) advertisements for which Facebook
`provided Potential Reach lower than 1000.
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`Dkt. No. 282 at 15.
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`The Court has written extensively on the standards for class certification, which informs
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`the discussion here. See, e.g., Sapan v. Yelp, Inc., No. 18-cv-3240-JD, 2021 WL 5302908 (N.D.
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`Cal. Nov. 15, 2021); Meek v. SkyWest, Inc., --- F. Supp. 3d ---, 2021 WL 4461180 (N.D. Cal. Sep.
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`29, 2021). A class action is “an exception to the usual rule that litigation is conducted by and on
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`behalf of the individual named parties only.” Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013)
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`(quotations omitted). The overall goal is “to select the metho[d] best suited to adjudication of the
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`controversy fairly and efficiently.” Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 568 U.S.
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`455, 460 (2013) (internal quotations omitted) (modification in original). Plaintiffs must show that
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`their proposed class satisfies all four requirements of Rule 23(a), and at least one of the
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`subsections of Rule 23(b). Comcast, 569 U.S. at 33 (2013); Zinser v. Accufix Research Inst., Inc.,
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`253 F.3d 1180, 1186 (9th Cir. 2001), amended by 273 F.3d 1266 (9th Cir. 2001). As the parties
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`seeking certification, plaintiffs bear the burden of showing that the requirements of Rule 23 are
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`met for their proposed class. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 588 (9th Cir. 2012).
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`The Court’s class certification analysis “must be rigorous and may entail some overlap
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`with the merits of the plaintiff’s underlying claim,” but merits questions may be considered only
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 4 of 17
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`to the extent that they are “relevant to determining whether the Rule 23 prerequisites for class
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`certification are satisfied.” Amgen, 568 U.S. at 465-66 (internal quotations and citations omitted).
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`The class certification procedure is decidedly not an alternative form of summary judgment or an
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`occasion to hold a mini-trial on the merits. Alcantar v. Hobart Service, 800 F.3d 1047, 1053 (9th
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`Cir. 2015). The decision of whether to certify a class is entrusted to the sound discretion of the
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`district court. Zinser, 253 F.3d at 1186.
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`III. RULE 23(B)(3) CLASS
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`The Rule 23(a) factors are the same for certification of the proposed class under Rule
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`23(b)(2) or (b)(3), and the conclusions reached here for the Rule 23(a) elements apply to both
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`types of classes. The main difference is the predominance element of Rule 23(b)(3), which Rule
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`23(b)(2) does not require. The Court takes up the proposed Rule 23(b)(3) class first.
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`The Court granted Meta’s motion for judgment on the pleadings to dismiss plaintiffs’ UCL
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`claims for restitution, see Dkt. No. 366, so monetary relief is only available for plaintiffs’ common
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`law fraudulent concealment and fraudulent misrepresentation claims.
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`A.
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`Numerosity (23(a)(1))
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`Rule 23(a)(1) requires that a proposed class be “so numerous that joinder of all members is
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`impracticable.” Fed. R. Civ. P. 23(a)(1). Plaintiffs state, with evidentiary support, that “[d]uring
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`each year of the class period, more than 2 million United States advertisers purchased Facebook
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`ads.” Dkt. No. 282 at 15. Meta does not contest numerosity, and the Court finds this element is
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`satisfied.
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`B.
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`Typicality and Adequacy (23(a)(3)-(4))
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`Rule 23(a) requires the named plaintiffs to demonstrate that their claims are typical of the
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`putative class, and that they are capable of fairly and adequately protecting the interests of the
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`class. Fed. R. Civ. P. 23(a)(3)-(4). The named plaintiffs say typicality is satisfied because they
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`“bring the same legal claims as the rest of the putative [c]lass” and “rely on the same grounds for
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`liability as the rest of the class.” Dkt. No. 282 at 17. Plaintiffs also say that they are adequate
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`representatives because “[t]hey have no conflicts with the class,” have “participated actively in
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 5 of 17
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`this case,” and their counsel has no conflicts, has experience with class actions, and has
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`demonstrated a “willingness to vigorously prosecute this action.” Id.
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`Meta makes multiple objections to adequacy and typicality. The primary one is that the
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`proposed class is said to include a diverse population of advertisers ranging from “‘large
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`sophisticated corporations’ to ‘individuals and small businesses.’” Dkt. No. 294 at 16-17. In
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`Meta’s view, this means that the putative class members are necessarily in such disparate positions
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`vis-à-vis its advertising services that the named plaintiffs, as advertisers on the smaller end of the
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`spectrum, cannot fairly or adequately represent them. Id.
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`The objection is not well taken. To start, typicality is demonstrated when “the claims or
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`defenses of the representative parties are typical of the claims or defenses of the class.” Hanlon v.
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`Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998), overruled on other grounds by Wal-Mart
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`Stores, Inc. v. Dukes, 564 U.S. 338 (2011). “The test of typicality is whether other members have
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`the same or similar injury, whether the action is based on conduct which is not unique to the
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`named plaintiffs, and whether other class members have been injured by the same course of
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`conduct.” (internal quotation marks omitted). Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d
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`1168, 1175 (9th Cir. 2010). “Under the rule’s permissive standards, representative claims are
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`‘typical’ if they are reasonably co-extensive with those of absent class members; they need not be
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`substantially identical.” Hanlon, 150 F.3d at 1019.
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`That is the situation here. Plaintiffs have adduced evidence indicating that, regardless of
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`size or buying power, Meta’s customers saw similar representations by Meta about its advertising
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`reach and programs. Advertisers were shown the same default Potential Reach of over 200
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`million people before they applied any targeting criteria. Dkt. No. 281-9 at ¶¶ 55-60. Plaintiffs’
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`expert, Dr. Charles Cowan, states that even with different targeting criteria for each advertiser,
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`inflated Potential Reach representations were made across Meta’s platform. Dkt. No. 281-11 at
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`¶ 33. All advertising customers were shown Potential Reach estimates that were inflated by a
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`similar percentage. Id. at ¶ 15.2
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`2 Dr. Cowan’s work is discussed in more detail later in the order.
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`It may be that class members differ in advertising budgets and scope of purchases, as Meta
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`suggests, but Meta has not shown that these differences defeat typicality or the named plaintiffs’
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`ability to adequately represent all class members. This is not a case where the record demonstrates
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`that the products, pricing, and programs accessed by class members were so dissimilar that
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`typicality and adequacy could not be established. See, e.g., In re Graphics Processing Units
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`Antitrust Litig., 253 F.R.D. 478, 489-90 (N.D. Cal. 2008) (denying certification of antitrust class
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`where evidence demonstrated putative class members purchased entirely different products at
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`different prices). In effect, Meta simply posits that typicality and adequacy cannot be established
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`because the class includes large and small ad purchasers. The problem with this approach is that it
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`is ipse dixit and not an evidence-based objection.
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`Meta’s case citations do not lead to a different conclusion. It overreads In re Facebook,
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`Inc., PPC Advertising Litig., 282 F.R.D. 446 (N.D. Cal. 2012), aff’d sub nom. Fox Test Prep v.
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`Facebook, Inc., 588 F. App’x 733 (9th Cir. 2014), to stand for the proposition that a “‘diverse
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`group’ of advertisers” necessarily undercuts adequacy and typicality. Dkt. No. 293-4 at 16-17.
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`But that case in fact determined that typicality had been demonstrated. In re Facebook, Inc.,, 282
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`F.R.D. at 453-54. Adequacy was not found because the record failed to show that the named
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`plaintiffs had suffered a concrete injury from the challenged conduct. Id. at 454. That is not a
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`circumstance present here.
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`Meta also has not demonstrated an evidence-based reason to reject the adequacy of the
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`named plaintiffs generally. Adequacy of representation asks whether: “(1) the representative
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`plaintiffs and their counsel have any conflicts of interest with other class members, and (2) will the
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`representative plaintiffs and their counsel prosecute the action vigorously on behalf of the class?”
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`Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 2003). Meta did not make a serious effort at
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`answering either inquiry in the negative, and plaintiffs have demonstrated that no such concerns
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`are in play here. See Dkt. No. 282 at 16-17.
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`Meta’s effort to recast its typicality and adequacy challenges as questions of reliance and
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`UCL standing is equally unavailing. See Dkt. No. 294 at 15. To start, named plaintiffs
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`demonstrated reliance by proffering evidence that DZ Reserve was deterred from using Meta ads
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`after learning that the Potential Reach was an inaccurate metric. Dkt. No. 293-27 at 193:17-194:5.
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`Similarly, named plaintiff Maxwell relied on Potential Reach to set his budgets and would not
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`have spent money on Meta ads if he knew Potential Reach was inaccurate. See Dkt. No. 293-29 at
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`199:8-12; Dkt. No. 317-2 at 257:3-14. Meta says that the named plaintiffs would still have
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`purchased ads if they knew the Potential Reach was inaccurate. Dkt. No. 294 at 16. But plaintiffs
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`also indicated that they would have spent less on ads after learning the Potential Reach was
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`inaccurate, demonstrating that they were deceived into spending more money. See, e.g., Dkt. No.
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`317-3 at 105:21-106:5. This and similar evidence also establishes reliance for UCL standing
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`purposes. See Walker v. Life Insurance Co. of the Sw., 953 F.3d 624, 630 (9th Cir. 2020) (“To
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`bring a UCL claim, a plaintiff must establish he suffered ‘as a result of’ the defendant’s conduct.”)
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`(quoting Cal. Bus. & Prof. Code § 17204); In re Tobacco II Cases, 46 Cal. 4th 298, 325 (Cal.
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`2009) (named plaintiffs, not absent ones, must provide evidence of actual reliance at the
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`certification stage).
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`Meta’s mention of an arbitration provision in contracts for advertising after May 2018,
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`Dkt. No. 294 at 17, also does not defeat the adequacy and typicality of the named plaintiffs. The
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`complaint in this case was filed in August 2018. Dkt. No. 1. Despite that, and knowing of the
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`arbitration clause and its possible application to plaintiffs, Meta never sought to compel
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`arbitration, and instead vigorously litigated this lawsuit in federal court as if arbitration were not
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`an option. A good argument can be made that Meta has waived arbitration on this record. See
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`Anderson v. Starbucks Corp., No. 20-cv-01178-JD, 2022 WL 797014 (N.D. Cal. March 16, 2022)
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`(and cases cited therein). In addition, the record shows that the named plaintiffs purchased ads
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`before and after May 2018, which indicates that they are adequate representatives for advertisers
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`who purchased ads both before and after May 28, 2018. See Dkt. No 328-2 at ¶ 21. If for some
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`presently unknown reason an adjustment to the class definition might be required on arbitration
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`grounds, the Court can alter or amend it at any time before entry of a final judgment. Fed. R. Civ.
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`P. 23(c)(1)(C); see also Powers v. Hamilton Cty. Pub. Def. Com'n, 501 F.3d 592, 619 (6th Cir.
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`2007).
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`Plaintiffs have satisfied the elements of adequacy and typicality.
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`C.
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`Commonality (23(a)(2)) and Predominance (23(b)(3)
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`The commonality requirement under Rule 23(a)(2) is satisfied when “there are questions of
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`law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). Because “any competently crafted
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`class complaint literally raises common questions,” the Court’s task is to look for a common
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`contention “capable of classwide resolution -- which means that determination of its truth or
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`falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”
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`Alcantar, 800 F.3d at 1052 (internal quotations and citations omitted). What matters is the
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`“capacity of a class-wide proceeding to generate common answers apt to drive the resolution of
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`the litigation.” Dukes, 564 U.S. at 350 (internal quotations omitted) (emphasis in original). This
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`does not require total uniformity across a class. “The existence of shared legal issues with
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`divergent factual predicates is sufficient, as is a common core of salient facts coupled with
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`disparate legal remedies within the class.” Hanlon, 150 F.3d at 1019. “[E]ven a single common
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`question will do.” Dukes, 564 U.S. at 359. The commonality standard imposed by Rule 23(a)(2)
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`is “rigorous.” Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir. 2013).
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`Rule 23(b)(3) sets out the related but nonetheless distinct requirement that the common
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`questions of law or fact predominate over the individual ones. This inquiry focuses on whether
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`the “common questions present a significant aspect of the case and [if] they can be resolved for all
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`members of the class in a single adjudication.” Hanlon, 150 F.3d at 1022 (internal quotations and
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`citation omitted); see also Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016). Each
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`element of a claim need not be susceptible to classwide proof, Amgen, 568 U.S. at 468-69, and the
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`“important questions apt to drive the resolution of the litigation are given more weight in the
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`predominance analysis over individualized questions which are of considerably less significance
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`to the claims of the class.” Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1134 (9th Cir. 2016).
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`Rule 23(b)(3) permits certification when “one or more of the central issues in the action are
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`common to the class and can be said to predominate, . . . even though other important matters will
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`have to be tried separately, such as damages or some affirmative defenses peculiar to some
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`individual class members.” Tyson, 577 U.S. at 453 (internal quotations omitted).
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`“Rule 23(b)(3)’s predominance criterion is even more demanding than Rule 23(a),”
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`Comcast, 569 U.S. at 34, and the main concern under subsection (b)(3) is “the balance between
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`individual and common issues.” In re Hyundai and Kia Fuel Economy Litigation, 926 F.3d 539,
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`560 (9th Cir. 2019) (en banc) (internal quotations omitted). The Court finds it appropriate to
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`assess commonality and predominance in tandem, with a careful eye toward ensuring that the
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`specific requirements of each are fully satisfied. See, e.g., Just Film, Inc. v. Buono, 847 F.3d
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`1108, 1120-21 (9th Cir. 2017).
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`1.
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`Liability
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`Plaintiffs have demonstrated that the main liability issues are common to the class
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`members and are capable of resolution with common evidence. For the fraudulent concealment
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`and fraudulent misrepresentation claims, plaintiffs must show: “(a) misrepresentation (false
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`representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent
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`to defraud, i.e. to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Engalla v.
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`Permanente Med. Grp., Inc., 15 Cal. 4th 951, 974 (1997). For plaintiffs’ UCL claims (for which
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`only commonality must be shown as part of the 23(a) factors, given the unavailability of monetary
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`relief), plaintiffs must show that members of the public were likely to be deceived. Williams v.
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`Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008) (claims under UCL and CLRA are
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`“governed by the ‘reasonable consumer’ test”; plaintiffs “must show that members of the public
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`are likely to be deceived”) (internal quotations and citations omitted).
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`Consequently, the main liability question is the same for all class members: did Meta’s
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`Potential Reach metric mislead advertisers? Meta does not disagree, and instead hurls a grab bag
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`of challenges to plaintiffs’ ability of proving an answer in their favor. Much of Meta’s argument
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`against commonality and predominance is simply that the evidence does not support plaintiffs’
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`case. That is not the pertinent inquiry at the certification stage. The question is whether it makes
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`sense under Rule 23 and as a matter of due process and efficiency to present the liability dispute to
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`a jury on behalf of a class. Whether plaintiffs can ultimately prove it up at trial is a different
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`matter altogether.
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 10 of 17
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`To the extent a merits inquiry is warranted, plaintiffs have adduced evidence showing that
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`all class members were exposed to a similar representation about the ability of Potential Reach to
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`reach “people,” namely unique individuals. See, e.g., Dkt. No. 282-3; Dkt. No. 281-9 at ¶¶ 55-60.
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`This is seen in the Ads Manager interface, which represented Potential Reach as a number of
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`people. See, e.g., Dkt. No. 281-8. The evidence further shows that Meta’s Potential Reach metric
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`was not actually an estimate of people reached, but an estimate of “accounts” reached. See Dkt.
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`No. 281-60 at ECF 10. Because the number of unique accounts and unique people were different,
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`this led to an inaccurate representation of how many people the advertisements could reach. See
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`Dkt. No. 281-11 at ¶ 15.
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`Meta does not dispute that the Potential Reach numbers were presented in terms of people.
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`Instead, Meta says that the Potential Reach numbers were not uniformly inaccurate as a result of
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`different targeting criteria producing different Potential Reach numbers. Dkt. No. 293-4 at 18-20.
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`Even so, Potential Reach was always expressed as a number of “people,” and the discrepancy
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`between people and accounts made the number inaccurate, even if the numerical value of the
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`inaccuracy varied across advertisers. Consequently, plaintiffs have shown that the question of
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`whether Meta made misrepresentations to all class members can be shown through common
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`evidence.
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`Meta’s knowledge of the misleading statements, and intent to deceive, also lend
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`themselves to resolution by common evidence. See, e.g., Brickman v. Fitbit, Inc., No. 15-cv-
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`2077-JD, 2017 WL 5569827, at *6 (N.D. Cal. Nov. 20, 2017) (citing Small v. Fritz Cos., Inc., 30
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`Cal. 4th 167, 173-74 (2003)). Several documents show that Meta knew that its Potential Reach
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`estimate did not accurately reflect the number of people its advertisements could reach. See Dkt.
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`No. 281-25; Dkt. No. 281-27. Meta’s intent for advertisers to rely on its Potential Reach numbers
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`is also provable through common evidence. Meta knew that the potential reach number was the
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`most important number in its ads creation interface and that advertisers frequently relied on the
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`estimated audience to build their budgets and advertising strategies. Dkt. No. 281-8.
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`So too for materiality and reliance. In common law and UCL fraud cases, questions of
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`materiality and reliance do not necessarily undermine predominance and commonality. Brickman,
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 11 of 17
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`2017 WL 5569827, at *6-*7; Milan v. Clif Bar & Co., No. 18-cv-2354-JD, 2021 WL 4427427, at
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`*5 (N.D. Cal. Sep. 27, 2021). “[A] presumption, or at least an inference, of reliance arises
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`wherever there is a showing that a misrepresentation was material.” Tobacco II Cases, 46 Cal. 4th
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`at 327. A misrepresentation is material “if a reasonable man would attach importance to its
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`existence or nonexistence in determining his choice of action in the transaction in question.” Id.
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`(internal quotations omitted). The question of materiality “can be proved through evidence
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`common to the class.” Amgen, 568 U.S. at 467. Plaintiffs have established that materiality and
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`reliance can be shown in this case through common evidence. Potential Reach metrics were
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`shown to all advertisers in the Ads Manager. Dkt. No. 282-3; Dkt. No. 282-4. Meta has
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`acknowledged that Potential Reach is an important number for advertisers. Dkt. No. 281-8. A
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`majority of advertisers rely on Potential Reach as a metric for their advertisements. Dkt. No. 281-
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`22.
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`Plaintiffs have also established that proof of injury is susceptible to common evidence.
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`Among other evidence, a report from Pivotal Research showed that Potential Reach numbers
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`exceeded census counts for various demographics, Dkt. No. 282-22 and several internal
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`documents indicated various causes of inflated Potential Reach levels, see, e.g., Dkt. No. 282-28;
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`282-7; 282-31; 282-32. Plaintiffs’ expert, Dr. Cowan, conducted a statistical analysis to determine
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`the percentage of inflation for both nationwide and targeted advertisements. See Dkt. No. 282-8.
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`He concluded that it was a statistical certainty that, for any advertisement with a Potential Reach
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`of at least 1,000 people or more, the estimate would be significantly inflated above the actual
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`number of people the advertisement could reach. Id.
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`Meta says that Dr. Cowan improperly assumed that the inflated estimates found in the
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`default national population (United States, aged 18-65) Potential Reach were equally applicable
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`across all targeted groups, and that each measure of inflation was distributed across targeted
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`groups. Dkt. No. 281-11 ¶ 82. Meta’s expert, Dr. Steven Tadelis, says that this is a flawed
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`assumption because Meta’s data sampling shows that sources of inflation are not distributed
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`evenly across all smaller demographics that an advertiser might choose. Dkt. No. 293-44 ¶ 125.
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`But Dr. Tadelis does not conclude that no inflation occurred at all, only that Dr. Cowan did not
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 12 of 17
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`measure the exact inflation resulting from any given targeting criteria because inflation for any
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`given sub population may be different from the inflation for the default national population. This
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`criticism does not foreclose classwide proof of injury.
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`2.
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`Damages and Daubert Motions re Dr. Allenby and Mr. McFarlane
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`While a damages methodology need not deliver mathematical precision, and may
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`accommodate some individual variability among class members, see In re Capacitors Antitrust
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`Litigation, No. 17-md-2801-JD, 2018 WL 5980139, at *9 (N.D. Cal. Nov. 14, 2018), it must be
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`capable of determining damages across the class in a reasonably accurate fashion. Comcast, 569
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`U.S. at 35 (plaintiffs bear burden of showing that “damages are susceptible of measurement across
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`the entire class for purposes of Rule 23(b)(3)”). The damages model “must measure only those
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`damages attributable to” the plaintiffs’ theory of liability. Id. Put plainly, the damages model
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`must reasonably reflect the claims and evidence in the case.
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`Plaintiffs have proffered experts who analyzed the evidence to arrive at a price premium
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`that advertisers paid for inflated Potential Reach values. Dkt. No. 281-3 at 21. Dr. Cowan
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`measured the amount of inflation associated with Potential Reach as a result of the misleading
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`“people” metric. Id. Dr. Allenby used a “conjoint survey” to test the impact of inflated Potential
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`Reach on advertisers’ budgets. Id. Dr. Roughgarden, an auction expert, calculated a price
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`premium. Id. Dr. Levy, an economist, confirmed that Dr. Roughgarden’s price premium properly
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`considered supply and demand, and that damages could be calculated on a classwide basis. Id.
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`Plaintiffs also offer expert witness Mr. McFarlane, who opined about the price premium class
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`members paid compared to if no potential reach metric was provided at all. Id.
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`Meta offers little in its class certification brief to attack plaintiffs’ damages models. It
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`relies instead on two separately filed Daubert motions to exclude the opinions of Dr. Allenby and
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`Mr. McFarlane, and by extension, the portions of Dr. Levy and Dr. Roughgarden’s opinions that
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`rely on the reports of Dr. Allenby and Mr. McFarlane. Dkt. Nos. 284-4, 284-6.
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`Overall, Meta has not demonstrated a good reason to exclude Dr. Allenby’s work. Under
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`the familiar standards of Federal Rule of Evidence 702 and Daubert v. Merrell Dow
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`Pharmaceuticals, Inc., 509 U.S. 579 (1993), there is no “definitive checklist or test” used to
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`Case 3:18-cv-04978-JD Document 388 Filed 03/29/22 Page 13 of 17
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`evaluate the reliability of proposed ex