Facebook Files Motion To Dismiss Advertising Estimate Class Action

Facebook has filed a motion to dismiss the third amended consolidated class action complaint against it. The social media giant has sought dismissal with prejudice in regards to the plaintiffs’ claims of breach of the implied covenant of good faith and fair dealing, quasi-contract, fraudulent concealment, and fraudulent misrepresentation because they allegedly failed to state a claim upon which relief can be granted. They additionally alleged that some of the claims were time-barred.

The underlying complaint alleged that Facebook knowingly exaggerated the “potential reach” numbers given when a user is purchasing an ad on the platform. The plaintiffs lised on the complaint are DZ Reserve and Cain Maxwell. The plaintiffs seek class certification for “All persons or entities who, from January 1, 2013, to the present (“Class Period”), had an account with Facebook, Inc., and who paid for placement of advertisements on Facebook’s platforms, including the Facebook and Instagram platforms.” Prior complaints list a larger set of plaintiffs; Danielle Singer, the first plaintiff on the original complaint, is not listed in the latest complaint.

In its motion to dismiss, Facebook stated “[t]his Court has already held that Facebook’s contract with Plaintiffs ‘explicitly disclaims an audience reach or target guarantee.’” They added that “[y]et Plaintiffs still make no effort to explain how they could have believed that their ads would reach the Potential Reach estimates (that they purportedly saw but still have not identified). Potential Reach is simply a free tool to estimate the number of people in an advertiser’s entire ‘target audience.’” Facebook claimed that this does not mean that an ad will reach the entire target audience, nor does it charge based upon target audience size; instead, they are charged based on the number of clicks or impressions their ad had. Facebook asserted that it does not guarantee an ad will reach a certain audience number. The defendant noted that the complaint in question is the fifth complaint in this two-year litigation.

The motion argued that the plaintiffs have failed to remedy the errors that have prompted the already thrice-amended complaint. The defendants asserted that plaintiffs’ “implied covenant claim fails because it is nothing more than a repackaged version of their failed breach of contract claim, which this Court dismissed.” Similarly, they argued that the plaintiffs do not identify any contract claim or promise that Facebook broke or “frustrated.”

Additionally, Facebook claims that the plaintiffs’ quasi-contract claim “is substantially the same as the quasi-contract claim the Court previously dismissed…[it] fails again because the parties have an express contract that governs their advertising relationship.” They went on to say that the court determined there cannot be both an express and implied contract on the same subject matter at the same time.

Facebook added that plaintiffs did not significantly amend the claims; the fraudulent misrepresentation claim allegedly fails because the plaintiffs “do not allege the specific content of the misstatements or how and why the statements misled them into buying more ad campaigns or paying a higher price.” Facebook claimed that it is still uncertain of the specific allegedly fraudulent estimates

Facebook is represented by Latham & Watkins. Plaintiffs are represented by Cohen Milstein Sellers & Toll.  The case is filed in the Northern District of California.