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ezGDS, INC. v. Kayak Software Corp.

May 5, 2010

EZGDS, INC., PLAINTIFF,
v.
KAYAK SOFTWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is Defendant's Motion to Strike. (Doc. # 19).

BACKGROUND

On November 9, 2009, Plaintiff initiated this action in the Superior Court of the State of California, County of San Diego by filing the Complaint. See Doc. # 1 at 5. On December 11, 2009, Defendant filed its Notice of Removal removing the case to this Court. Id. On January 11, 2010, Defendant filed a Motion to Strike. (Doc. # 9). On February 17, 2010, Plaintiff filed a First Amended Complaint ("FAC"). (Doc. # 17). On February 18, 2010, the Court struck Plaintiff's FAC. (Doc. # 19). The Court's order stated in part:

Pursuant to Federal Rule of Civil Procedure 15(a), a party may only file an amendment as a matter of course once within 21 days of serving the complaint, 21 days after an answer is filed, or 21 days after a motion is filed pursuant to Federal Rule of Civil Procedure 12(b), 12(e) or 12(f), whichever is earlier. "In all other cases, a party may amend its pleading only with the opposing party's written consent or the court's leave." Fed. R. Civ. Pro. 15(a)(2).

Defendant filed its Motion to Strike pursuant to Federal Rule of Civil Procedure 12(f) on January 11, 2010. (Doc. # 9). Plaintiff's FAC was filed February 17, 2010, outside the time allowed for filing an amended complaint as of right. See Doc. # 17. Plaintiff neither sought leave from the court, nor obtained written consent from the opposing party. The Court therefore strikes the FAC from the docket. If Plaintiff wishes to file an amended complaint, Plaintiff shall file written consent of the opposing party or a motion for leave to amend within ten days of the date of this order. . . .

Id. at 2. The Court denied Defendant's Motion to Strike without prejudice, stating Some of the references Defendant seeks to strike were removed from the FAC Plaintiff filed on February 17, 2010. See Doc. # 17. Although the original complaint is still the operative pleading, Plaintiff has indicated that it wishes to filed an amended complaint.

Although the Court denied Defendant's Motion to Strike on these grounds, the Court allowed Defendant "leave to refile." Id. 3. The order further stated:

If Plaintiff does not file a motion for leave to amend or written consent of the opposing party within ten (10) days of the date of this order, Defendant's answer to the original complaint (Doc. # 1) or other responsive pleading is due twenty (20) days from the date of this order.

Id. Plaintiff did not file either a motion for leave to amend or written consent of the opposing party. Therefore, the original Complaint remains the operative pleading in this case. On March 18, 2010, Defendant filed its renewed Motion to Strike. (Doc. # 19).

ALLEGATIONS OF THE COMPLAINT

Plaintiff is a small travel technology company based in San Diego, California. Defendant operates Kayak.com and Sidestep.com, two travel websites. (Doc. # 1 at 7). These sites "are essentially comparison shopping vehicles for consumers that display airfares from a variety of other travel web-sites." Id. Plaintiff advertises on Defendant's websites on a pay-per-click basis. Id. Each time a visitor to one of Defendant's websites clicks on Plaintiff's ad, a set price (or "cost-per-click") is charged against Plaintiff's budgeted amount for that budget cycle. Once the authorized budget for that budget cycle is exhausted, Plaintiff's advertisements stop appearing on Defendant's websites unless Plaintiff authorizes additional spending. Id.

In December of 2007, Plaintiff entered a contract with Defendant which authorized $1,059,999.85 in advertising on Defendant's websites, which would amount to 3,890,741 clicks on Plaintiff's advertisement. Id. at 8. The money was to be spent over five separate advertising campaigns, which would run through December 31, 2008. Id. Defendant was required under the terms of the contract to "create a reasonably balanced delivery schedule" over the course of the contract period and to report weekly to Plaintiff on the campaign's progress. Id. at 9.

Although the funds were slated to cover a twelve to eighteen month period, Defendant reported that the entire budget was expended within two months. Id. None of the clicks resulted in a "conversion," which occurs when the user "mak[es] a purchase or register[s] for a service" on the advertiser's website. Id. at 7, 9. Plaintiff "knew there must have been some sort of technical error" and "demanded reports/supporting documentation." Id. at 10. Defendant refused to provide documentation and insisted on full payment. Id. Defendant subsequently demanded Plaintiff pay a total of $1,210,296.37 based on a "purported revision" to the order. Id. However, the "purported revision" to the original order "was unsigned . . . ." Id. In later invoices, Defendant billed Plaintiff at rates that were higher on a per-click basis than the parties had agreed to. Id. Defendant repeatedly refused to provide documentation ...


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