Court denies class status to Facebook advertisers

Advertisers accuse social network of breach of contract, violating unfair competition law

Facebook Inc. scored yet another legal win last week.

On Friday, an Oakland, Calif., district judge denied class action status to a group of advertisers who sued Facebook in 2009. The advertisers accused the world’s largest social network of overcharging them on their “cost-per-click” contracts, which required them to pay fees each time Facebook users clicked their ads. The advertisers say Facebook breached its contract and violated California’s unfair competition law because it charged them for nonexistent clicks, for clicks that didn’t open, for clicks that server problems caused and for accidental multiple user clicks.

But U.S. District Judge Phylllis Hamilton, citing the epic 2011 Supreme Court case Dukes v. Wal-Mart Stores, Inc., which limited class certification, said the Facebook advertisers didn’t demonstrate a “systemic breach of contract” and didn’t have similar enough claims to be considered a class.

“The court is persuaded by Facebook’s argument that plaintiffs have not shown that they have a viable method for proving each class member’s recovery,” Judge Hamilton wrote. “The need to determine both liability and damages on an individualized basis makes this case inappropriate for class treatment.”

According to Thomson Reuters, Judge Hamilton has scheduled a conference for May 17 to discuss how best to proceed with the case.

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