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NDCA Court Partly Grants Motion for Judgment on the Pleadings in Facebook Advertisement Case

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Last Friday, Judge James Donato agreed to partially grant Facebook’s motion for judgment on the pleadings in a case alleging that Facebook inflated estimates of how many users advertisers could reach on its platforms. The court granted the advertising purchaser plaintiffs’ California’s Unfair Competition Law (UCL) restitution claims, but not their injunctive relief claims. The decision comes while the plaintiffs’ motion for class certification is pending.

The putative class action of 3 million individuals and businesses alleges that Facebook inflated estimates of how many users prospective advertisers could reach by purchasing advertisements on its Facebook and Instagram platforms. Facebook’s motion to dismiss was partly granted in February 2021, leaving the plaintiffs’ UCL and common law fraudulent misrepresentation and fraudulent concealment claims intact.

Since then, Facebook filed a motion for judgment on the pleadings as to the plaintiffs’ UCL claims, arguing that a 2020 Ninth Circuit case, Sonner v. Premier Nutrition Corp., bars them. The plaintiffs opposed. Last week’s two-page opinion addresses that contention.

Judge Donato ruled that under Sonner, when pleading a UCL claim, plaintiffs must show that they lack an adequate remedy at law in order to seek equitable relief. “Plaintiffs say they have alleged a lack of adequate legal remedy, but they do not point to any such allegations in the complaint,” the decision said.

Their attempt to distinguish the case by suggesting that their UCL and common law fraud claims seek different amounts in restitution and damages because the statute of limitations will prevent some class members from recovering for fraud claims was unpersuasive. “Even assuming that were true for present purposes, the fact that some class members’ claims may be barred by the statute of limitations does not mean that the legal remedies available to them are inadequate,” the opinion said.

The court held that the harmful conduct the plaintiffs seek to enjoin, namely Facebook’s alleged inflation of potential reach estimates, cannot be remedied by an award of damages. “That is also true for the future availability of remedies for future harms,” the court said in concluding that Sonner does not bar their injunctive relief claims.

Facebook is represented by Latham & Watkins LLP and the plaintiffs by Cohen Milstein Sellers & Toll PLLC and Law Offices of Charles Reichmann.

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