United States District Court, N.D. California
ORDER DENYING PLAINTIFFS' MOTION FOR APPOINTMENT
OF INTERIM CLASS COUNSEL
THELTON E. HENDERSON United States District Judge.
March 13, 2017, Plaintiffs filed a Motion for Appointment of
Interim Class Counsel. ECF No. 35 (“Mot.”).
Defendant Facebook (“Facebook”) timely opposed
the motion, ECF No. 43 (“Opp'n”), and
Plaintiffs timely replied, ECF No. 44 (“Reply”).
The Court heard oral arguments on Plaintiffs' motion on
April 17, 2017, and also granted Plaintiffs a post-hearing
opportunity to address In re Nest Labs Litigation,
Case No. 14-cv-01363-BLF, 2014 U.S. Dist. LEXIS 115596 (N.D.
Cal. Aug. 18, 2014), through a two-page brief. After
carefully considering the parties' written and oral
arguments, the Court DENIES Plaintiffs' motion for the
reasons set forth below.
is a social media company that, rather than charge its
account holders to access its site, makes over 95% of its
overall revenue by selling advertising services. Compl.
¶ 15. One type of advertising service that Facebook
offers is video advertisements, where advertisers can pay
money to have video displayed to Facebook users. Id.
¶ 16. Facebook's video advertising services include
marketing analytics, which allow advertisers to monitor the
effectiveness of their video ads. Id. ¶ 18.
Advertisers rely on these tools to determine where to spend
advertising dollars and the effectiveness of the dollars
spent on the video ads. Id.
2014, Facebook began providing video advertising purchasers
with more marketing analytics metrics. Id. ¶
20. These included the “Average Duration of Video
Viewed, ” which measured the average amount of time
that users watched a video. Plaintiffs allege this metric is
particularly important because “the longer people watch
an advertisement, the greater the advertisement's impact
on the viewer.” Id. ¶ 21. Advertisement
purchasers were told this metric was calculated by dividing
the total time spent watching the video by all users by the
total number of users who spent any time watching the video.
Id. ¶ 26. However, in August 2016, Facebook
disclosed its “Average Duration of Video Viewed”
metric had been improperly calculated as it was dividing the
total time spent watching the video by all users by the total
number of users who spent three or more seconds watching the
video. Id. ¶ 27.
filed this putative class action suit seeking to represent
the following class: “All persons or entities who, from
May 4, 2014 to September 23, 2016 (“Class
Period”), had an account with Facebook, Inc. and who
paid for placement of video advertisements on a
Facebook-owned website.” Id. ¶ 43.
Plaintiffs allege three claims for relief: (1) Violation of
the California Unfair Competition Law; (2) Breach of Implied
Duty to Perform with Reasonable Care; and (3) Quasi-contract
claim for Restitution. Id. ¶¶ 54- 77.
October 27, 2016, the Plaintiffs in Letizia v.
Facebook, Case No. 3:16-cv-06232-TEH, filed suit. In
January 2017, the Plaintiffs in Quirky v. Facebook,
Case No. 3:17-cv-00233-TEH, filed suit. Both of these
lawsuits involved a putative class action against Facebook
alleging the same claims, on behalf of similar classes, for
the same conduct. On January 24, 2017, the Plaintiffs in the
Quirky case filed an administrative motion to relate
their case to the Letizia case. Letizia,
ECF No. 25. The Letizia Plaintiffs filed an
opposition to this motion arguing the Quirky case
was a “copycat” lawsuit subject to dismissal or
stay under the “first to file” doctrine and that
the Quirky Plaintiffs' pending bankruptcy
proceedings could unnecessarily complicate or delay
resolution of the Letizia action. Letizia,
ECF No. 27 at 2:21-27. In addition, on January 30, 2017, the
Letizia Plaintiffs filed a Motion to Intervene in
the Quirky case in an attempt to dismiss or stay the
case. Quirky, ECF No. 10. One week later, on
February 6, 2017, the Court issued an order relating the two
cases. Letizia, ECF No. 29. Shortly thereafter, the
Letizia Plaintiffs withdrew their motion to
intervene in the Quirky case, see Quirky, ECF No.
29, and the Plaintiffs from both cases, along with Defendant
Facebook, filed a joint stipulation seeking to consolidate
both cases, see Letizia, ECF No. 31, which the Court
granted, see Letizia, ECF No. 32.
Court is provided broad authority in making class counsel
appointments. 7B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1802.3 (3d ed. 2017).
Federal Rule of Civil Procedure 23(g)(3) allows the Court to
“designate interim counsel to act on behalf of the
putative class before determining whether to certify the
action as a class action.” While Rule 23(g)(3) does not
provide a standard for courts to use in appointing interim
class counsel, courts in this district typically consider the
factors set forth in Federal Rule of Civil Procedure
23(g)(1). Gallagher v. Bayer AG, Case No.
14-cv-04601-WHO, 2015 WL 4932292 (N.D. Cal. Aug. 18, 2015).
These factors include: (1) the work counsel has done in
identifying or investigating the potential claims in the
action; (2) counsel's experience in handling class
actions, complex litigation, and the types of claim asserted
in the action; (3) counsel's knowledge of the applicable
law; and (4) the resources that counsel will commit to
representing the class. Fed.R.Civ.P. 23(g)(1)(A).
the parties do not dispute whether the three firms, either
collectively or individually, can adequately represent the
class, the parties dispute whether an appointment of interim
class counsel is warranted. In support of their motion,
Plaintiffs argue appointing interim class counsel will render
many benefits, including avoiding future delays and conflicts
over case leadership, simplified recordkeeping of attorney
billing, and increased certainty for Facebook regarding what
counsel to deal with. Mot. at 3-4. Plaintiffs also cite
several cases in which courts have granted a motion to
appoint interim class counsel. See, e.g., Corcoran v. CVS
Health Corp., 169 F.Supp.3d 970, 994 (N.D. Cal. 2016);
In re Hyundai Sonata Engine Litig., No.
5:15-cv-1685-BLF, ECF No. 35 (N.D. Cal. Sept. 8, 2015).
However, the motions to appoint interim class counsel in
these cases went unopposed. Plaintiff also cites to
Gallagher v. Bayer AG, No. 14-cv-04601-WHO, 2015 WL
4932292, at *8 (N.D. Cal. Aug. 18, 2015), where the court
stated that the plaintiffs in that case had “pointed to
several cases in which courts have appointed interim class
counsel in the absence of other class suits.” While the
Gallagher court's statement was true, a closer
examination of the cases the court relied on in making the
statement illustrate that those cases, too, involved
unopposed motions to appoint interim class
counsel. At the same time, the Gallagher
court did grant an opposed motion to appoint interim class
counsel because the plaintiffs satisfied the Rule 23(g)(1)
factors, and also because the defendants did not present a
compelling reason to deny the motion, nor did they show how
they would be prejudiced. Gallagher, 2015 WL
4932292, at *8.
on the other hand, argues there is no need for appointment of
interim lead counsel because this action involves a single,
consolidated suit, with no rival suits or firms on the
horizon; and also because Plaintiffs' counsel are already
cooperating with each other and Facebook. Opp'n at 1. And
“[w]here there are no competing lawsuits or firms,
courts in this district have been unwilling to appoint
interim class counsel.” See In re Seagate Tech. LLC
Litig., Case No. 16-cv-00523-RMW, 2016 WL 3401989 (N.D.
Cal. June 21, 2016) (collecting cases).
Court finds this case is analogous to In re Nest Labs
Litigation, Case No. 14-cv-01363-BLF, 2014 U.S. Dist.
LEXIS 115596 (N.D. Cal. Aug. 18, 2014), where the court
rejected the appointment of interim class counsel. As in this
case, that case arose from two separate cases with similar
complaints that were later related and then consolidated by
the parties' stipulation. Id. at *3. In deciding
to deny Plaintiffs motion to appoint interim class counsel,
the court noted that Plaintiffs had not identified any
“tag-along” suits on the horizon, nor did there
appear to be any rivalry between the two firms or uncertainty
as to their respective roles. Id. at *4. In fact,
the Court recognized that the plaintiffs had already been
coordinating and collaborating efficiently. Id. In
closing, the Court recognized it was “not necessary to
appoint interim class counsel merely to maintain the
status quo.” Id. at *5. Here, like the
plaintiffs in In re Nest, the separate
plaintiffs' counsel are presently collaborating and the
parties have not shown any signs that a rivalry exists. And
while Plaintiffs attempt to demonstrate a rivalry does indeed
exist, they also concede that the Letizia counsel
and Quirky counsel “were at ...