Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 1 of 9
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`David C. Kiernan (State Bar No. 215335)
`dkiernan@jonesday.com
`Craig E. Stewart (State Bar No. 129530)
`cestewart@jonesday.com
`Lin W. Kahn (State Bar No. 261387)
`lkahn@jonesday.com
`JONES DAY
`555 California Street, 26th Floor
`San Francisco, California 94104
`Telephone: +1.415.626.3939
`Facsimile: +1.415.875.5700
`
`Catherine T. Zeng (State Bar No. 251231)
`czeng@jonesday.com
`JONES DAY
`1755 Embarcadero Road
`Palo Alto, California 94303
`Telephone: +1.650.739.3939
`Facsimile: +1.650.739.3900
`
`Attorneys for Defendants
`ALPHABET INC. and GOOGLE LLC
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`DREAM BIG MEDIA, INC., GETIFY
`SOLUTIONS, INC., and SPRINTER
`SUPPLIER LLC, Individually and on Behalf
`of all Others Similarly Situated,
`
`Plaintiff,
`
`v.
`
`ALPHABET INC. and GOOGLE LLC,
`
`Defendants.
`
`Case No. 4:22-cv-02314-JSW
`
`DEFENDANTS’ REPLY IN
`SUPPORT OF MOTION TO STRIKE
`CLASS ACTION ALLEGATIONS
`
`September 30, 2022
`Date:
`9:00 a.m.
`Time:
`Judge: Hon. Jeffrey S. White
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`REPLY ISO MOTION TO STRIKE
`Case No. 22-CV-2314-JSW
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 2 of 9
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION .......................................................................................................................... 1
`ARGUMENT .................................................................................................................................. 1
`I.
`THE COURT HAS AUTHORITY TO STRIKE CLASS ALLEGATIONS ..................... 1
`II.
`PLAINTIFFS FAIL TO ESTABLISH THAT THE CLASS IS DEFINED IN
`SUCH A WAY THAT THOSE WITHIN IT WOULD HAVE STANDING .................... 2
`A.
`“Developers” or “Users” Who Were Not Purchasers Cannot Be in the Class ........ 2
`B.
`Users Who Have Merely Had Free Credits Depleted “More Rapidly”
`Cannot Be in the Class ............................................................................................ 3
`PLAINTIFFS’ CLASS DEFINITION IS IMPERMISSIBLY “FAIL SAFE.” .................. 5
`III.
`CONCLUSION ............................................................................................................................... 6
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 3 of 9
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`TABLE OF AUTHORITIES
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`Page
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`CASES
`
`Brazil v. Dell Inc.,
`585 F. Supp. 2d 1158 (N.D. Cal. 2008) .................................................................................... 6
`
`Brown v. Google LLC,
`No. 20-CV-03664-LHK, 2021 WL 6064009 (N.D. Cal. Dec. 22, 2021) ................................. 4
`
`Bruton v. Gerber Prods. Co.,
`No. 12-CV-02412 LHK, 2018 WL 4181903 (N.D. Cal. Aug. 31, 2018) ................................. 2
`
`Calhoun v. Google LLC,
`526 F. Supp. 3d 605 (N.D. Cal. 2021) ...................................................................................... 4
`
`In re Anthem, Inc. Data Breach Litig.,
`No. 15-MD-02617-LHK, 2016 WL 3029783 (N.D. Cal. May 27, 2016) ................................. 4
`
`In re Yahoo! Inc. Customer Data Sec. Breach Litig.,
`No. 16-MD-02752-LHK, 2017 WL 3727318 (N.D. Cal. Aug. 30, 2017) ................................ 5
`
`Khrapunov v. Prosyankin,
`931 F.3d 922 (9th Cir. 2019) ..................................................................................................... 5
`
`Klein v. Facebook, Inc.,
`580 F. Supp. 3d 743 (N.D. Cal. 2022) ...................................................................................... 4
`
`Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC,
`31 F.4th 651 (9th Cir. 2022) (en banc) ..................................................................................... 5
`
`Sanchez v. L.A. Dep’t of Transp.,
`39 F.4th 548 (9th Cir. 2022) ..................................................................................................... 5
`
`Tietsworth v. Sears, Roebuck & Co.,
`720 F. Supp. 2d 1123 (N.D. Cal. 2010) .................................................................................... 1
`
`Uschold v. Carriage Servs., Inc.,
`No. 17-CV-04424-JSW, 2020 WL 1466172 (N.D. Cal. Mar. 6, 2020) .................................... 6
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`REPLY ISO MOTION TO STRIKE
`Case No. 22-CV-2314-JSW
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 4 of 9
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`INTRODUCTION
` Google’s motion explained the two independent bases for striking plaintiffs’ class
`allegations. First, the alleged class includes persons who could not have suffered a cognizable
`injury because they purchased nothing from Google at all, such as “developers” and “users” who
`merely used Google’s mapping API services as well as plaintiffs who used their free usage credits
`“more rapidly.” Second, the class is impermissibly fail-safe because the only way to identify
`certain putative class members—those who were injured “because of the anticompetitive
`allegations” and others “who continue to experience anticompetitive harm as a result of the
`allegations herein”—is to resolve the merits of their claim.
`Plaintiffs have no valid answer to either point. They assert that the class is limited to
`purchasers because the complaint excludes indirect purchasers who paid less than 100% of the
`purchase price. But that assertion ignores the proposed definition’s express inclusion of users
`who did not purchase API services at all. Plaintiffs argue that class members who used their free
`usage credits “more rapidly” suffered a cognizable injury by citing inapposite cases involving a
`loss of property, while failing to recognize that the free usage credits are neither property nor
`property belonging to plaintiffs. Finally, plaintiffs misrepresent Ninth Circuit caselaw as
`permitting fail-safe classes and argue that their class definition is not fail-safe, even though the
`only way to determine certain membership in the class is to evaluate the merits of plaintiffs’
`claims.
`
`I.
`
`ARGUMENT
`THE COURT HAS AUTHORITY TO STRIKE CLASS ALLEGATIONS.
`Plaintiffs do not dispute that the Court “has authority to strike class allegations prior to
`discovery if the complaint demonstrates that a class action cannot be maintained.” Tietsworth v.
`Sears, Roebuck & Co., 720 F. Supp. 2d 1123, 1146 (N.D. Cal. 2010). They argue only that
`striking class allegations is “rare” at the pleading stage and is generally “more” appropriate later
`in the litigation after discovery. Opp. 9. But the invalidity of plaintiffs’ overbroad and improper
`fail-safe class definition does not turn on any factual issues for which any discovery is needed—
`and plaintiffs identify none. It can be read on the face of the complaint. If the Court does not
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 5 of 9
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`dismiss the action entirely, addressing this legal issue now will “streamline the ultimate resolution
`of the action” and “avoid the expenditure of time and money” that would arise with litigating a
`class definition that cannot be sufficient. Bruton v. Gerber Prods. Co., No. 12-CV-02412 LHK,
`2018 WL 4181903, at *6 (N.D. Cal. Aug. 31, 2018) (cleaned up). Resolving this issue now will
`also provide clarity to putative class members, who are entitled to a clear class definition so that
`they can determine whether this lawsuit affects their rights.
`II.
`PLAINTIFFS FAIL TO ESTABLISH THAT THE CLASS IS DEFINED IN SUCH
`A WAY THAT THOSE WITHIN IT WOULD HAVE STANDING.
`Plaintiffs do not dispute that a class definition must be limited to persons with standing.
`See Mot. 3 (citing cases). They argue only that their definition complies with this requirement.
`But plaintiffs’ arguments fail to respond to Google’s arguments and only exacerbate the
`confusion surrounding their class definition.
`A.
`“Developers” or “Users” Who Were Not Purchasers Cannot Be in the Class.
`As Google’s motion details, plaintiffs’ class definition includes “app or website
`developers” or “other types of users” as distinct from “direct purchasers.” This definition
`necessarily includes “developers” and “users” who were not injured and thus cannot be class
`members because they have never purchased anything (or even had their free credits depleted)—
`they merely used the API services. For example, the class definition encompasses a third-party
`developer who “used” a Google mapping API service in designing a web site but who never paid
`for any API service calls. The class definition is also broad enough to include a person who
`merely visits a website that uses Google’s API services. Such an imprecise class definition must
`be struck.
`Plaintiffs insist that their class definition “specifically exclude[s] the indirect victims,”
`including those highlighted in Google’s motion, because the complaint excludes indirect
`purchasers who bought from a direct purchaser that did not pass on 100% of the purchase price.
`Opp. 3, 10 (citing ECF 1, ¶ 48). But those indirect purchasers actually made purchases.
`Excluding this subset of purchasers says nothing about “developers” or “users” who paid nothing
`at all. If plaintiffs insist that the class is actually limited to direct purchasers of Maps, Routes, and
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 6 of 9
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`Places APIs, and indirect purchasers to whom 100% of the purchase price was passed along, they
`should amend their complaint accordingly. That is particularly true given that plaintiffs’
`opposition brief is vague about what the limitation actually is. Cf. id. at 2 (stating that class
`includes “direct users who have purchased or used” the APIs); id. at 7 (referring to standing to
`“represent the Class of direct users”); id. at 14 (“Plaintiffs have properly proposed a Class that
`includes direct users”) (emphases added).
`B.
`Users Who Have Merely Had Free Credits Depleted “More Rapidly” Cannot
`Be in the Class.
`Plaintiffs’ class definition includes another group of persons who have suffered no
`cognizable injury: users who have merely had their free credits consumed “more rapidly” than
`they otherwise would have before Google’s allegedly anticompetitive price changes. As Google
`explained, class members who have never needed more than the free credit balance allotted to
`them have suffered no cognizable injury because they have never actually paid anything to
`Google—let alone an overcharge. Mot. 4.
`Plaintiffs argue that these class members were harmed because they did not get as much
`free use from Google APIs as they otherwise would have. But receiving less of a free service is
`not a cognizable economic injury. Plaintiffs are entitled to be free from supracompetitive
`overcharges. They are not entitled to free unlimited use of Google’s mapping API services.
`Plaintiffs cite no authority (and Google is aware of none) holding that a plaintiff has suffered
`antitrust injury because the plaintiff did not receive as much of a free good or service.
`Rather than substantiate their novel theory of antitrust injury, plaintiffs cite cases
`recognizing that losing non-cash property can sometimes be a cognizable economic injury. But
`such cases have no application here because Google’s allowance of free credits does not grant any
`property right. Plaintiffs allege only that Google allowed a certain amount of free usage of its
`mapping API services. They do not allege any facts showing that they were given any right to
`sell, transfer, or retain whatever amount they opt not to use or any right to continue to receive
`credits in the future. See ECF 31, Ex. B, § 3.2.1 [https://cloud.google.com/maps-platform/terms]
`(customer cannot “sell, resell, sublicense, transfer, or distribute the Services”). Much as guests
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 7 of 9
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`you invite over to dinner do not gain a property right entitling them to take home any food they
`decide not to eat, developers do not have a property right to free API use. Nor does your dinner
`guest have any property right to continue to be invited over to dinner and to be offered the same
`menu on each visit. Thus, even if Google lowered the amount or value of the free services that it
`was providing, that would be Google offering less of its own property to plaintiffs, not depriving
`them of their property.
`
`Plaintiffs’ suggestion that the value of free-tier credits “can easily be determined based on
`the corresponding prices that Google Maps charges . . . once the free-tier credits are depleted”
`(Opp. 11–12) highlights the issue. Consider class members who never used all of their free
`monthly usage credits, even after the allegedly anticompetitive price increase. Under plaintiffs’
`approach, those class members would receive cash (e.g., in a settlement or judgment) as
`compensation for having had less free usage credits available at the end of each month—even
`though those credits would never have been used anyway. This would not be compensating any
`injury; it would be a windfall. Nothing in the antitrust laws permits this proposed loss-of-more-
`free-use theory of injury or recovery.
`
`Because free usage credits are neither “property” nor plaintiffs’ property, the cases
`plaintiffs cite are irrelevant. See In re Anthem, Inc. Data Breach Litig., No. 15-MD-02617-LHK,
`2016 WL 3029783, at *13, *15 (N.D. Cal. May 27, 2016) (plaintiffs can allege sufficient
`economic injury from losing their personal data if they “allege that there was either an economic
`market” for that data “or that it would be harder to sell their own [data]”); Brown v. Google LLC,
`No. 20-CV-03664-LHK, 2021 WL 6064009, at *15 (N.D. Cal. Dec. 22, 2021) (wrongful
`collection of plaintiffs’ data was plausible injury to withstand dismissal because complaint
`included numerous allegations regarding market for the data and how its value could be
`quantified); Klein v. Facebook, Inc., 580 F. Supp. 3d 743, 802 (N.D. Cal. 2022) (allegations of
`plaintiffs’ loss of “personal information and attention” were sufficiently pled where there was an
`alleged market for monetizing information and attention of technology users); Calhoun v. Google
`LLC, 526 F. Supp. 3d 605, 636 (N.D. Cal. 2021) (relying on Anthem and other cases to find,
`without elaboration, that plaintiffs who lost their personal information plausibly alleged an
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 8 of 9
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`economic injury) (emphases added).1
`III.
`PLAINTIFFS’ CLASS DEFINITION IS IMPERMISSIBLY “FAIL SAFE.”
`Plaintiffs’ argument that their class definition is not impermissibly fail-safe turns almost
`entirely on their mistaken view that the Ninth Circuit “disapproves of the premise that a class can
`be ‘fail-safe.’” Opp. 14 (citing an unpublished memorandum disposition). But plaintiffs ignore
`controlling language from the Ninth Circuit’s recent decision in Olean Wholesale Grocery Coop.,
`Inc. v. Bumble Bee Foods LLC, 31 F.4th 651 (9th Cir. 2022) (en banc). Olean made clear that
`“[a] court may not . . . create a ‘fail safe’ class that is defined to include only those individuals
`who were injured by the allegedly unlawful conduct.” Id. at 669 n.14. Plaintiffs also accuse
`Google of “ignor[ing] the numerous district court decisions that have certified classes with ‘fail-
`safe’ definitions.” Opp. 14. But those cases (all of which pre-date Olean) should be ignored:
`none of them ruled on whether there was a fail-safe definition or even considered the issue, let
`alone held that a fail-safe definition is proper. Because “[i]t is axiomatic that cases are not
`authority for issues not considered,” Khrapunov v. Prosyankin, 931 F.3d 922, 933 (9th Cir. 2019),
`these cases are irrelevant.
`Plaintiffs also suggest that their class definition does not pose a fail-safe problem at all.
`Opp. 13–14. But their argument merely recites their view that the class is limited to those who
`have “purchased” the APIs and that they “have demonstrated the harm to [the] proposed Class.”
`Id. at 14. Such statements ignore their actual proposed definition, which expressly includes in the
`class persons who were injured “because of the anticompetitive allegations” and others “who
`continue to experience anticompetitive harm as a result of the allegations herein.” ECF 1, ¶ 46.
`This definition is impermissibly fail-safe because the only way to identify which putative class
`members were injured “because of” or “as a result of” the challenged conduct is to resolve the
`
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`1 Plaintiffs’ other cases are even further afield. See In re Yahoo! Inc. Customer Data Sec.
`Breach Litig., No. 16-MD-02752-LHK, 2017 WL 3727318, at *13 (N.D. Cal. Aug. 30, 2017)
`(victims of data breach adequately alleged credible threat of real and immediate harm given that
`the hackers would “sooner or later” assume those customers’ identity or misuse their personal
`information); Sanchez v. L.A. Dep’t of Transp., 39 F.4th 548, 554 (9th Cir. 2022) (plaintiff had
`standing where the harm alleged was “specified by the Constitution itself—the violation of the
`Fourth Amendment guarantee against unreasonable searches and seizures” (cleaned up)).
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`Case 4:22-cv-02314-JSW Document 40 Filed 09/20/22 Page 9 of 9
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`merits of their claim.
`Accordingly, plaintiffs offer no reason for this Court to diverge from its prior ruling that a
`fail-safe class that “improperly requires the Court to decide the merits of the case in order to
`solidify class membership” should be rejected. Uschold v. Carriage Servs., Inc., No. 17-CV-
`04424-JSW, 2020 WL 1466172, at *11 (N.D. Cal. Mar. 6, 2020) (White, J.) (rejecting a fail-safe
`class definition). Because plaintiffs’ class definition makes membership dependent on the merits
`of plaintiffs’ claims, the Court should strike the class definition as an improper fail-safe class.
`See Brazil v. Dell Inc., 585 F. Supp. 2d 1158, 1167 (N.D. Cal. 2008) (striking class definition of
`all persons who purchased products that Dell “falsely advertised as discounted” at the pleading
`stage).
`
`CONCLUSION
`The class action allegations in the complaint should be stricken.
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`Dated: September 20, 2022
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`
`JONES DAY
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`By: /s/ David C. Kiernan
`David C. Kiernan
`
`Attorneys for Defendants
`Alphabet Inc. and Google LLC
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