In AdTrader Inc. v. Google LLC, No. 20-15542 (9th Cir. July 30, 2021), the Ninth Circuit holds that an interim award of fees in a class action that is paid by the defendant, rather than through a common fund, is not subject to an interlocutory appeal.
Google LLC runs advertising platforms for digital ads, and advertisers pay Google to place their ads on third-party websites. “Google does not charge advertisers . . . when Google determines, using automated filters, that an impression, click, or conversion does not ‘reflect genuine user interest,’ or when the advertising traffic is connected to a website publisher’s violation of Google’s policies.”
“In December 2017, [advertiser] AdTrader sued Google on behalf of itself, a putative class of advertisers who did not receive refunds or credits for transactions that Google represented to publishers as ‘invalid traffic,’ and a putative subclass of ‘[a]ll business and Google-recognized advertising agencies and advertising networks that had an active AdWords account as of September 1, 2017.’ AdTrader alleged, inter alia, breach of contract, unjust enrichment, and violations of California’s unfair competition statute.”
In the second year of litigation, Google issued $65.7 million in refunds to advertisers who used one particular Google platform, called DoubleClick Bid Manager (DBM Advertisers). “Two weeks after class certification, the district court issued an order, awarding AdTrader some but not all of the attorneys’ fees it had requested (the ‘Fee Order’).” The award of $725,580.80 was avowedly based on the “common fund doctrine,” though in substance “Google stipulated that it would pay AdTrader’s attorneys’ fees, if awarded by the Court, out of Google’s own pocket, rather than have them deducted from any common fund for payments to class members.”
AdTrader filed an interlocutory appeal of the amount of the fee, while the rest of the case was pending, but the Ninth Circuit dismisses. “AdTrader … argues that orders awarding attorneys’ fees under the common fund doctrine belong to this ‘narrow and selective’ club of collaterally appealable orders.” The Ninth Circuit agrees that “There may be occasions when an attorneys’ fee award from a common fund might conceivably meet the three requirements of the collateral order doctrine. For example, if a district court were to order immediate disbursement of a common fund, including both awards to class members and ‘interim fees’ to attorneys, additional fees might not later be recoverable from that already-disbursed fund if the award was later determined to have been too low.”
This case was different from an ordinary common-fund fee, the panel observes, because the amount of the fee – paid by Google, not from the class fund – can be reviewed after the final judgment. “AdTrader’s request for attorneys’ fees is not effectively unreviewable on appeal, because there is little risk counsel’s right to fees—whether equitable or contractual—will be destroyed if not vindicated before judgment … [T]hose fees will remain available because Google has undisputedly agreed to pay whatever amount the district court ultimately determines AdTrader is entitled to. Indeed, as this shows, this is really not a classic common fund award, since payment of the attorneys’ fees will not come from the fund, but directly from Google.”
“In short, this is neither a traditional common fund case nor one that meets the requirements of the collateral order doctrine. The litigants and the district court may have agreed that attorneys’ fees should be determined in light of common fund principles, but they also agreed that “any award of attorneys’ fees here would not come from a sum that Google has been ordered to pay the class.” This alone shows that this case neither fits the situation under which the ‘common fund’ doctrine developed nor meets the requirement of unreviewability that is essential to the limited collateral order exception to finality.”
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