DZ Reserve et al v. Facebook, Inc.

Northern District of California, cand-3:2018-cv-04978

AMENDED COMPLAINT Second Amended Consolidated against All Defendants. Filed by Danielle A Singer, Project Therapy, LLC.

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8 1 Andrew Friedman (pro hac vice) Geoffrey Graber (SBN 211547) 2 Eric Kafka (pro hac vice) 3 Julia Horwitz (pro hac vice) COHEN MILSTEIN SELLERS & TOLL PLLC 4 1100 New York Ave. NW, Fifth Floor Washington, DC 2000 5 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 6 afriedman@cohenmilstein.com 7 ggraber@cohenmilstein.com ekafka@cohenmilstein.com 8 jhorwitz@cohenmilstein.com 9 Counsel for Plaintiffs and Proposed Class 10 11 [Additional counsel on signature page] 12 13 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA 14 15 Danielle A. Singer, Project Therapy, LLC Case No.: 3:18-cv-04978 16 (d/b/a Therapy Threads), Holly Dean, DZ Reserve, and Cain Maxwell (d/b/a Max SECOND AMENDED CONSOLIDATED 17 Martialis) individually and on behalf of others CLASS ACTION COMPLAINT 18 similarly situated, DEMAND FOR JURY TRIAL 19 Plaintiffs, CLASS ACTION 20 v. 21 FACEBOOK, INC., 22 Defendant. 23 24 25 26 27 28 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a Therapy Threads), Holly Dean, DZ 2 Reserve, and Cain Maxwell (d/b/a Max Martialis), individually and on behalf all others similarly 3 situated, hereby file suit against Facebook, Inc., and allege the following: 4 INTRODUCTION 5 1. Facebook, Inc. ("Facebook") is a social media company that "generate[s] substantially 6 all of [its] revenue from advertising."1 In 2017, Facebook earned approximately $40 billion from 7 advertising revenue.2 8 2. The core of Facebook's business is its large purported user base, which ostensibly 9 enables advertisements placed on Facebook.com to reach a large number of people. Facebook claims 10 to have 2.13 billion monthly active users globally, with over 240 million monthly active users in the 11 U.S. alone.3 12 3. Before advertisers make a purchase, Facebook represents that their advertisements can 13 potentially reach a specified number of people ("Potential Reach"). Facebook defines "potential reach" 14 as "an estimation of how many people are in an ad set's target audience."4 Depending on the 15 demographic targeting selected by the advertiser, the Potential Reach is often millions of people. 16 Facebook also represents that the advertisement will reach an estimated number of people per day 17 ("Estimated Daily Reach"). The Estimated Daily Reach is based, in part, on the audience size or 18 Potential Reach. According to Facebook, Estimated Daily Reach "gives you an idea of how many of 19 the people in your target audience [or Potential Reach] you may be able to reach on a given day." 5 20 4. These foundational representations are false. Based on publicly available research and 21 Plaintiffs' own analysis, Facebook overstates the Potential Reach of its advertisements. For example, 22 based on publicly available data, Facebook's purported Potential Reach among the key 18-34 year-old 23 1 24 Facebook, Inc., Annual Report (Form 10-K) for 2017 Fiscal Year, at 41 (Feb. 1, 2018). 2 25 Id., at 43 (Feb. 1, 2018). 3 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation 26 (last accessed August 1, 2018) 27 4 See "About potential Reach", available at https://www.facebook.com/adsmanager/creation 5 See What are "Potential Reach" and "Estimated Daily Reach?", available at 28 https://www.facebook.com/business/help/717368264947302/?ref=u2u (last accessed August 1, 2018) 2 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 demographic in every state exceeds the actual population of 18-34 year-olds. Based on a combination 2 of publicly available research and Plaintiffs' own analysis, among 18-34-year-olds in Chicago, for 3 example, Facebook asserted its Potential Reach was approximately 4 times (400%) higher than the 4 number of real 18-34 year-olds with Facebook accounts in Chicago. Based on a combination of 5 publicly available research and Plaintiffs' own analysis, Facebook's asserted Potential Reach in Kansas 6 City was approximately 200% higher than the number of actual 18-54 year-olds with Facebook 7 accounts in Kansas City. This inflation is apparent in other age categories as well. 8 5. Facebook's own former employees have confirmed the problem. For example, a former 9 Facebook employee who worked in the infrastructure/mapping team, (Confidential Witness 1), stated 10 that those who were responsible for ensuring the accuracy of the Potential Reach at Facebook were 11 indifferent to the actual numbers and in fact "did not give a sh--." This former employee further stated 12 that the" Potential Reach" statistic is "like a made-up PR number." Another former Facebook employee 13 (Confidential Witness 2), stated that Facebook does not care about the accuracy of information related 14 to the number of users so long as advertising revenue is not negatively affected. And a third former 15 Facebook employee (Confidential Witness 3), stated that Facebook was not concerned with stopping 16 duplicate or fake accounts in calculating Potential Reach. 17 6. Because Facebook has inflated its Potential Reach, Plaintiffs and putative class 18 members purchased more advertisements from Facebook and paid a higher price for advertisements 19 than they otherwise would have. Plaintiffs and putative class members accordingly seek compensation 20 and injunctive relief for violations of California's Unfair Competition Law, breach of contract, and for 21 restitution. 22 JURISDICTION 23 7. This Court has subject matter jurisdiction over this action under 28 U.S.C. § 1332(d)(2) 24 because this is a class action wherein the amount in controversy exceeds the sum or value of 25 $5,000,000, exclusive of interest and costs, there are more than 100 members in the proposed class, 26 and at least one member of the class of Plaintiffs is a citizen of a state different from a Defendant. 27 8. This Court has personal jurisdiction over Defendant Facebook, Inc., because Facebook, 28 3 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Inc., is headquartered in California, and conducts business in the state of California. 2 9. Venue is proper in this Court pursuant to 28 U.S.C. §1391(b) because a substantial part 3 of the events or omissions giving rise to the claims occurred in, were directed to, and/or emanated from 4 this District. Venue is also proper because Facebook's terms of service require that claims be resolved 5 "exclusively in the U.S. District Court for the Northern District of California or a state court located in 6 San Mateo County…."6 7 PARTIES 8 10. Plaintiff Danielle Singer is a citizen and resident of the state of Kansas. Plaintiff owns 9 and operates a business, Project Therapy, LLC, under the trade name Therapy Threads in the state of 10 Kansas. The primary business activity of Therapy Threads is the selling of aromatherapy fashionwear, 11 sold online through the United States. 12 11. Plaintiff Project Therapy, LLC is a limited liability company registered to do business 13 in the state of Kansas. 14 12. Plaintiff Holly Dean is a citizen and resident of the state of Florida. 15 13. Plaintiff DZ Reserve is a company incorporated and headquartered in the state of 16 Colorado. 17 14. Plaintiff Cain Maxwell is a citizen and resident of the state of Ohio. 18 15. Defendant Facebook, Inc., is incorporated in Delaware, and its principal place of 19 business is 1 Hacker Way, Menlo Park, CA 94025. 20 FACTUAL ALLEGATIONS 21 16. Facebook is one of the largest social media companies in the world. It owns and operates 22 Facebook.com, as well as Instagram and the WhatsApp Messenger service. 23 17. In 2017, Facebook saw its revenues from online advertisements reach approximately 24 $40 billion.7 25 26 6 27 Facebook, Statement of Rights and Responsibilities, https://www.facebook.com/terms (last accessed: June 17, 2019). 7 28 Facebook, Inc., Annual Report (Form 10-K) for 2017 Fiscal Year, at 41 (Feb. 1, 2018), at 43. 4 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 18. In marketing its online advertisement services, Facebook claims that more than 2 billion 2 people use Facebook every month.8 Additionally, in its Ads Manager, Facebook has claimed that 240 3 million of those active users are located in the United States.9 4 19. Until approximately March 12, 2019, Facebook's Potential Reach was based, at least in 5 part, on estimates of the number of people who were active users in the past month.10 After March 12, 6 2019, Potential Reach is based, at least in part, on how many people have been shown an ad on a 7 Facebook Product in the past 30 days who match the respective advertiser's desired audience and 8 placement criteria.11 9 20. Facebook defines a Monthly Active User (MAU) as a "registered Facebook user who 10 logged in and visited Facebook through [Facebook's] website or a mobile device, or used [Facebook's] 11 Messenger application (and is also a registered Facebook user), in the last 30 days as of the date of 12 measurement. MAUs are a measure of the size of our global active user community."12 13 21. Audience size is an important factor when advertisers determine where to spend 14 marketing dollars. Indeed, Potential Reach and Estimated Daily Reach are the only information 15 Facebook provides to advertisers regarding the anticipated performance of the ad campaign prior 16 purchasing an advertisement. Moreover, user inflation can skew an advertiser's decision making, 17 which is frequently based on the anticipated reach of the advertising campaign, or "Potential Reach."13 18 22. Reach inflation can have "real consequences for an advertiser's overall communications 19 plain."14 For advertisers, "Facebook Ads Manager functions as a tool for an advertiser to plan, budget, 20 21 8 Facebook, Inc., Annual Report (Form 10-K) for 2017 Fiscal Year, at 41 (Feb. 1, 2018), at 34. 22 9 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation (last accessed August 1, 2018). 23 10 See Updates to Potential Reach, available at 24 https://www.facebook.com/business/help/567031670465069?helpref=faq_content (last accessed June 14, 2019) 11 25 Id. 12 26 Facebook, Inc., Annual Report (Form 10-K) for 2017 Fiscal Year, at 41 (Feb. 1, 2018), at 36 13 "Facebook Audience Inflation a Global Issue-Ad News Study", AdNews (September 8, 2017) 27 available at http://www.adnews.com.au/news/facebook-audience-inflation-a-global-issue-adnews- study (visited July 16, 2018). 28 14 Video Advertising Bureau, "Facebook's Reach (on Reach), Miscalculations in the Age of 5 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 buy and optimize their own campaigns across Facebook platforms."15 2 23. Facebook's large purported potential reach is widely acknowledged as one of the main 3 reasons that advertisers choose to purchase advertisements from Facebook. 4 24. For example, an online advertising commentator recently noted that the large number of 5 people that can potentially be reached on Facebook is one of the four "reasons why you can't ignore 6 Facebook advertising."16 7 25. Similarly, Aleksandar Radonjic, the Founder and Chief Growth Strategist at Evolving 8 Digital (a digital marketing agency) explained in his blog post, "Why Facebook Has To Be Included in 9 Your Marketing Plan" that "big brands understand the value of Facebook and are actively engaged with 10 their customers. Small and medium-sized organizations have to do the same, even if you are a small 11 local business because the potential reach is unmatched by any other social media platform." (emphasis 12 added).17 13 26. Moreover, Facebook itself encourages advertisers to refer to the Potential Reach after 14 they have started an advertising campaign to determine the percentage of their target audience that they 15 have reached.18 16 I. Facebook's Representations to Advertisers 17 27. In describing the advantages of advertising on its website, Facebook tells advertisers 18 that "[t]wo billion people use Facebook every month."19 19 28. Facebook touts the reach of its platform, telling advertisers "Show your ads to more 20 21 22 Precision", p. 19, September 2017, available at https://www.thevab.com/wp-content/uploads/2017 /09/Facebooks-Reach.pdf (accessed August 6, 2018). 15 23 Id. 24 16 "4 Reasons Why You Can't Ignore Facebook Advertising," InstaPage (September 10, 2018) https://instapage.com/blog/4-reasons-facebook-advertising-cant-be-ignored (last accessed December 25 19, 2018). 17 "Why Facebook Has to Be Included in Your Marketing Plan," Aleksandar Radonjic, 26 http://www.evolving-digital.com/resources/Facebook-Marketing (last accessed December 19, 2018). 18 27 https://www.facebook.com/business/help/1639908612985580 (last accessed December 19, 2018). 19 28 Quoted from https://www.facebook.com/business/products/ads (accessed August 13, 2018). 6 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 people in more places. Improve your reach by running your ads across Facebook, Instagram, and 2 Audience Network."20 3 29. Facebook makes these representations when advertisers purchase advertisements from 4 Facebook, which they do through Facebook's "Ads Manager." 5 30. The terms on the "Ads Manager" are part of Facebook's contract with advertisers. 6 31. The "Ads Manager" provides only two data points related to audience size, "Potential 7 Reach" and "Estimated Daily Results Reach." The Estimated Daily Results Reach is derived in part 8 from the Potential Reach audience size. Facebook's Estimated Daily Reach "gives you an idea of how 9 many of the people in your target audience [or Potential Reach] you may be able to reach on a given 10 day."21 11 32. The Potential Reach and the Estimated Daily Results Reach are provided to every 12 advertiser who purchases advertisements through Ads Manager, and are part of Facebook's contract 13 with advertisers. 14 33. On the "Ads Manager," advertisers can target their advertisement to users of different 15 demographics. See Figure 1. Using the demographic criteria on "Ads Manager," advertisers can target 16 people in various locations, age ranges, or genders. 17 18 19 20 21 22 23 24 25 26 20 27 Id. 21 See What are "Potential Reach" and "Estimated Daily Reach?", available at 28 https://www.facebook.com/business/help/717368264947302/?ref=u2u (last accessed August 1, 2018) 7 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Figure 1 2 3 4 5 6 7 8 9 10 11 12 13 14 34. Regardless of the demographic criteria used to target the advertisements, the "Ads 15 Manger" shows a graphic with the audience size based on the criteria that advertisers selected. See 16 Figure 2. 17 Figure 2 18 19 20 21 22 23 24 35. Below the audience size graphic, the "Ads Manager" states "Potential Reach: ________ 25 people." See Figure 2. The "Ads Manager" displays the "Potential Reach" statistic before the advertiser 26 purchasers the advertisement. 27 36. Facebook consistently represents that the Potential Reach is a measurement of actual 28 8 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 people, not just accounts. 2 37. The Ads Manager graphic displaying the Potential Reach and Estimated Daily Results 3 Reach is shown on multiple consecutive pages on Ads Manager where advertisers input information 4 before purchasing an advertisement. See Exhibit 1, Facebook's Ads Manager.22 The Potential Reach 5 and Estimated Daily Reach are included on the same page where advertisers set the budget and schedule 6 for their advertisements: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 38. When an advertiser clicks on the "i" icon next to the Potential Reach, Facebook's 26 27 Exhibit 1 to Plaintiffs' Second Amended Consolidated Class Action Complaint is identical to 22 28 ECF No. 66-3 (Exhibit C to Facebook's Motion to Dismiss Consolidated Class Action Complaint). 9 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 website states, "Estimates are based on the placements and targeting criteria you select and include 2 factors like Facebook user behaviors, user demographics and location data. They're designed to 3 estimate how many people in a given area could see an ad a business might run. They're not designed 4 to match population or census estimates. Numbers may vary due to performance reasons." (emphasis 5 added) See Figure 3. 6 39. Yet, Facebook fails to disclose to advertisers that its Potential Reach statistic is inflated. 7 8 Figure 3 9 10 11 12 13 14 15 16 17 18 19 40. When an advertiser clicks on "Learn More" for potential reach, Facebook's website 20 states, "Potential reach is an estimation of how many people are in an ad set's target audience…. It 21 updates in real time as you create or edit your ad set to help you understand how your targeting and 22 placement choices affect the number of people you could reach." (emphasis added) See Figure 4. 23 24 25 26 27 28 10 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 2 Figure 4 3 4 5 6 7 8 9 10 41. Facebook's Advertiser Help Center states that the "Potential Reach is an estimation of 11 the potential number of people your ads could reach."23 12 II. Facebook's Potential Reach is Inflated 13 42. According to Census data, the U.S. population numbered over 320 million individuals 14 in 2017, with just over 250 million adults over 18 years old.24 15 43. Facebook represents to advertisers a Potential Reach of 230 million monthly active users 16 over the age of 18 in the U.S.25 17 44. According to a 2018 survey from the Pew Research Center, 68% of U.S. adults, aged 18 18 and over, use Facebook.26 Based on this 68% figure, only 170 million U.S. adults have a Facebook 19 account. Thus, Facebook represents to advertisers that it has approximately 35% more users in the 20 United States than it actually does. 21 45. Using the usage rate estimate provided by Pew Research Center, Facebook's Potential 22 Reach is inflated with respect to the 18 years and over demographic in the four largest states, as set 23 24 23 Quoted from https://www.facebook.com/business/help (accessed August 13, 2018). 25 24 See United States Census Bureau's "American Fact Finder" available at https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=PEP_2017_PEPA 26 GESEX&prodType=table (last accessed August 1, 2018). 27 25 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation (last accessed August 1, 2018) 28 26 Pew Research Center, March 2018, "Social Media Use in 2018". 11 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 forth below: 2 Estimated Facebook's 3 State Actual Facebook Users27 Claimed Reached28 Inflation Rate 4 California 20.7 million 30 million 45% 5 Texas 14.2 million 21 million 48% Florida 11.4 million 16 million 40% 6 New York 10.6 million 16 million 50% 7 8 46. Among the most important – if not the most important – demographic for advertisers is 9 the 18-34 year-old audience. This is because younger audiences are generally believed to have less 10 brand loyalty and more disposable income.29 11 47. Even more inflated is the key marketing demographic of young adults aged 18-34, where 12 the U.S. population in 2017 numbered just under 76 million.30 Facebook represents to advertisers that 13 it can reach 100 million people in this age category.31 Accordingly, Facebook claims that it can reach 14 24 million more people in this demographic than actually exist. Additionally, according to Pew 15 Research only 80% of this demographic actually use Facebook.32 Thus, only 61 million 18-34 year- 16 olds are actually using Facebook, resulting in a nationwide inflation rate of 64%. 17 48. Nor can this discrepancy be explained by non-resident travelers. Facebook indicates that 18 its Potential Reach among 18-34 year olds in the United States includes less than 2 million non-resident 19 travelers. See Figure 5. 20 21 27 These figures are based on the U.S. Census Bureau's estimated demographic size and 22 accounting for the national average of Facebook participation as determined by Pew Research's polling data of 68%. 23 28 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation (last accessed August 1, 2018) 24 29 See e.g., Weinman, Jaime J. (2012). "Television's mid-life crisis." Maclean's. 125 (27): 72 25 30 See United States Census Bureau's "American Fact Finder", available at https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=PEP_2017_PEPSY 26 ASEXN&prodType=table (last accessed August 1, 2018). 27 31 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation (last accessed August 1, 2018) 28 32 Pew Research Center, March 2018, "Social Media Use in 2018". 12 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 2 Figure 5 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 49. Publicly available research has shown that the Potential Reach for 18-34 year-olds is 18 not only overstated at a national level but exceeds the U.S. Census Population Data in every state. See 19 Figure 6.33 20 21 22 23 24 25 26 27 33 28 Video Advertising Bureau Report, at 13. 13 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Figure 6 2 3 4 5 6 7 8 9 10 11 12 13 14 15 50. The difference between Facebook's Potential Reach and U.S. Census Bureau statistics 16 can be illustrated at the metropolitan level as well. For example, the following chart provides examples 17 of the massive inflation of Facebook's claimed Potential Reach in selected cities: 18 51. Other examples34 from September 2017 for the 18-34 year-old demographic include: 19 City 18-34 year-old Census Pop. Facebook's Claimed Reach Inflation Rate 20 Dallas 379,567 1,200,000 216% Houston 645,229 1,800,000 179% 21 Los Angeles 1,125,300 2,700,000 140% New York 2,305,171 4,100,000 78% 22 Philadelphia 459,386 1,100,000 139% 23 Phoenix 410,220 720,000 76% San Antonio 401,801 690,000 72% 24 San Diego 434,646 760,000 75% San Jose 256,343 490,000 91% 25 26 52. Because not every 18-34 year-old has a Facebook Account, the discrepancy between 27 34 28 See Video Advertising Bureau Report, at 14. 14 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Facebook's Potential Reach for the 18-34 year-old demographic and the Census Population does not 2 capture the full extent to which Facebook's Potential Reach is overstated. 3 53. For example, Plaintiffs commissioned their own survey to determine the percentage of 4 18-34 years old in Chicago who have a Facebook account. The survey found that 59% of 18-34 year- 5 olds in Chicago have Facebook accounts. In September 2017 in Chicago, Facebook's Potential Reach 6 was 1,900,000. However, the Census Population for 18-34 year-olds in Chicago was only 808,785.35 7 Thus, based on this comparison alone, Facebook's Potential Reach for 18-34 years old in September 8 2017 was 2.35 times the Census Population. 9 54. The inflation of Facebook's Potential Reach is even more dramatic when compared to 10 the survey. In 2017, based on the survey described above, approximately 485,000 actual Chicago 11 residents between 18-34 had Facebook accounts. Therefore, when Facebook represented that the 12 "Potential Reach" for this demographic was 1,900,000, it was almost 4 times that true number of people 13 potentially reached. 14 55. A similar analysis reveals dramatic inflation of the Potential Reach number in Kansas 15 City. Among the 18-54-year-olds demographic in the Kansas City metropolitan area, Facebook claims 16 advertisements placed on its marketplace have the potential to reach 1.4 million people.36 17 56. But the 18-54 demographic in the Kansas City metropolitan area only consists of 18 approximately 1 million people.37 And even then, based on survey data commissioned by the Plaintiff 19 only 70% of that demographic has Facebook accounts. This puts the inflation rate in Kansas City at 20 100%. 21 III. Former Facebook Employees Confirm the Problem 22 57. Former Facebook employees have acknowledged that Facebook did not care about the 23 accuracy of its "Potential Reach" statistic. 24 35 25 Id. 26 See Facebook's Ads Manager, available at https://www.facebook.com/adsmanager/creation 36 (last accessed August 1, 2018) 27 37 See United States Census Bureau's "American Fact Finder", available at https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_10_SF1_QT 28 P2&prodType=table (last accessed August 1, 2018). 15 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 58. When asked about Facebook's reach numbers, Confidential Witness 1, a data rating and 2 labeling specialist formerly employed at Facebook, stated that the Potential Reach statistic sounds "like 3 a made-up PR number" and that it was "fluff". When asked if Facebook cared about getting these 4 numbers right, Confidential Witness 1 stated that those who were responsible for ensuring the accuracy 5 "did not give a sh--." 6 59. When directly asked about potential inflation of Facebook's user base, Confidential 7 Witness 2, a former Engineering Lead with Facebook, stated that Facebook does not care about the 8 accuracy of information related to number of users so long as advertising revenue is not negatively 9 affected. Confidential Witness 2 believed that number of Facebook purported users – and therefore the 10 Potential Reach – is inflated. 11 60. Confidential Witness 3, a former Operations Contractor with Facebook, stated that 12 Facebook was not concerned with stopping duplicate or fake accounts. Confidential Witness 3 13 explained that Facebook primarily relied on ad hoc written complaints from Facebook users and 14 ineffective algorithms to assure accuracy. Generally, Confidential Witness 3 claimed Facebook was 15 only concerned with accounts created for nefarious purposes and Facebook turned a blind eye to other 16 non-unique individual accounts. 17 IV. Facebook's User Base Inflation Is Material 18 61. Advertising purchasers, including Plaintiffs Danielle A. Singer, Project Therapy, LLC 19 (d/b/a Therapy Threads), Holly Dean, DZ Reserve, and Cain Maxwell viewed the "Potential Reach" as 20 an important statistic because it means that more individuals could potentially view their advertisement. 21 62. Facebook fails to disclose to advertisers that its Potential Reach statistic is inflated. 22 63. Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a Therapy Threads), Holly 23 Dean, DZ Reserve, and Cain Maxwell read Facebook's "Potential Reach" prior to purchasing 24 advertisements from Facebook, and they relied on Facebook's "Potential Reach" in making their 25 decisions to purchase advertisements from Facebook. 26 64. Facebook's misrepresentation of the Potential Reach of its advertisements induced 27 advertising purchasers (including Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a Therapy 28 16 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Threads), Holly Dean, DZ Reserve, and Cain Maxwell) to purchase advertisements, which they 2 otherwise would not have purchased, because purchasers (including Plaintiffs Danielle A. Singer, 3 Project Therapy, LLC (d/b/a Therapy Threads), Holly Dean, DZ Reserve, and Cain Maxwell) believed 4 that more people could potentially be reached by their advertisements than possibly could have been. 5 65. Facebook's misrepresentation of the Potential Reach of its advertisements induced 6 advertising purchasers (including Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a Therapy 7 Threads), Holly Dean, DZ Reserve, and Cain Maxwell) to pay more for Facebook advertising than they 8 otherwise would have been willing to pay. 9 66. Facebook's misrepresentation of the Potential Reach of its advertisements thereby 10 distorted the market price for its advertising by artificially increasing the price of Facebook advertising, 11 causing advertising purchasers (including Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a 12 Therapy Threads), Holly Dean, DZ Reserve, and Cain Maxwell) to pay more than they otherwise would 13 have paid. 14 67. Facebook's misrepresentation of the Potential Reach of its advertisements provided 15 Facebook with an unfair competitive advantage over other advertising platforms including other online 16 advertising platforms, such as YouTube, LinkedIn, and Twitter. 17 PLAINTIFFS' EXPERIENCES 18 68. As noted above, Facebook's Potential Reach is vastly inflated at the national, state, 19 and local levels. Thus, the inflation impacted the Potential Reach and Estimated Reach of Plaintiffs' 20 advertising campaigns on Facebook. 21 Danielle Singer and Therapy Threads 22 69. Plaintiff Danielle Singer ("Singer") owns and operates Plaintiff Project Therapy, LLC 23 d/b/a Therapy Threads ("Therapy Threads"). 24 70. Therapy Threads is an online business that sells aromatherapy fashionwear and 25 accessories, including scarfs, jewelry, and essential oils. 26 71. During the period starting in October 2013 and ending in April 2018, Plaintiff Singer 27 ran advertising campaigns on Facebook platforms (including the Facebook and Instagram platforms) 28 17 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 for Therapy Threads. 2 72. Over this time period, Plaintiffs Singer and Therapy Threads paid Facebook over 3 $14,000 for Facebook advertisements. 4 73. Plaintiffs Singer and Therapy Threads read Facebook's "Potential Reach" prior to 5 purchasing advertisements from Facebook, and they relied on Facebook's "Potential Reach" in making 6 their decisions to purchase advertisements from Facebook. 7 74. Plaintiffs Singer and Therapy Threads read Facebook's "Estimated Daily Results 8 Reach" prior to purchasing advertisements from Facebook, and they relied on Facebook's "Estimated 9 Daily Results Reach" in making their decisions to purchase advertisements from Facebook. 10 75. Plaintiffs Singer and Therapy Threads ran nationwide campaigns for various age 11 demographics, as well as campaigns targeted at specific large metropolitan areas, including, but not 12 limited to, Austin, Chicago, Dallas, Denver, Kansas City, Las Vegas, Los Angeles, New York, San 13 Diego, San Francisco, and Phoenix. For example, in October 2017, Plaintiffs Singer and Therapy 14 Threads purchased advertising campaigns on Facebook targeting 18-35 year-olds in the Chicago 15 metropolitan area. Plaintiffs Singer and Therapy Threads also purchased multiple advertising 16 campaigns in the Kansas City metropolitan area, the metropolitan area where Plaintiff Singer resides. 17 76. Plaintiffs Singer and Therapy Threads wish and intend to purchase additional 18 advertisements from Facebook in the future. However, if Facebook continues to inflate its Potential 19 Reach and Estimated Daily Results Reach, it will be difficult for Plaintiffs Singer and Therapy Threads 20 to trust Facebook's representations about the Potential Reach and Estimated Daily Results Reach of 21 Plaintiffs' Facebook advertisements or other statistics provided by Facebook about Facebook 22 advertisements. 23 Holly Dean 24 77. Plaintiff Holly Dean ("Dean") is a citizen and resident of the state of Florida. 25 78. In January 2016, Plaintiff Dean ran advertising campaigns on Facebook platforms 26 (including the Facebook platform). 27 79. Plaintiff Dean paid Facebook approximately $ 40 for Facebook advertisements. 28 18 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 80. Plaintiff Dean read Facebook's "Potential Reach" prior to purchasing advertisements 2 from Facebook, and Plaintiff Dean relied on Facebook's "Potential Reach" in making her decision to 3 purchase advertisements from Facebook. 4 81. Plaintiff Dean read Facebook's "Estimated Daily Results Reach" prior to purchasing 5 advertisements from Facebook, and Plaintiff Dean relied on Facebook's "Estimated Daily Results 6 Reach" in making her decision to purchase advertisements from Facebook. 7 DZ Reserve 8 82. Plaintiff DZ Reserve is a company incorporated and headquartered in Colorado. 9 83. Plaintiff DZ Reserve operates several e-commerce stores. 10 84. Between December 2017 and December 2018, Plaintiff DZ Reserve ran advertising 11 campaigns on Facebook platforms (including Facebook and Instagram platforms). 12 85. Over this time period, Plaintiff DZ Reserve paid Facebook approximately $ 1 million 13 dollars for Facebook advertisements. 14 86. Plaintiff DZ Reserve read Facebook's "Potential Reach" prior to purchasing 15 advertisements from Facebook, and Plaintiff DZ Reserve relied on Facebook's "Potential Reach" in 16 making Plaintiff's decision to purchase advertisements from Facebook. 17 87. Plaintiff DZ Reserve read Facebook's "Estimated Daily Results Reach" prior to 18 purchasing advertisements from Facebook, and Plaintiff DZ Reserve relied on Facebook's "Estimated 19 Daily Results Reach" and in making Plaintiff's decision to purchase advertisements from Facebook. 20 88. Plaintiff DZ Reserve ran nationwide campaigns, as well as campaigns targeted at 21 specific cities, including, but not limited to, Los Angeles and New York City. 22 89. Plaintiff DZ Reserve wishes and intends to purchase additional advertisements from 23 Facebook in the future. However, if Facebook continues to inflate its Potential Reach and Estimated 24 Daily Results Reach, it will be difficult for Plaintiff DZ Reserve to trust Facebook's representations 25 about the Potential Reach and Estimated Daily Results Reach of Plaintiff's Facebook advertisements 26 or other statistics provided by Facebook about Facebook advertisements. 27 28 19 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 Cain Maxwell 2 90. Plaintiff Cain Maxwell ("Maxwell"), d/b/a Max Martialis, is a citizen and resident of 3 the state of Ohio. 4 91. From approximately September 2018 to May 2019, Maxwell ran advertising campaigns 5 on Facebook platforms (including the Facebook platform). 6 92. Over this time period, Maxwell paid Facebook approximately $ 400 for Facebook 7 advertisements. 8 93. Plaintiff Maxwell read Facebook's "Potential Reach" prior to purchasing 9 advertisements from Facebook, and Plaintiff Maxwell relied on Facebook's "Potential Reach" in 10 making his decision to purchase advertisements from Facebook. 11 94. Plaintiff Maxwell read Facebook's "Estimated Daily Results Reach" prior to purchasing 12 advertisements from Facebook, and Plaintiff Maxwell relied on Facebook's "Estimated Daily Results 13 Reach" in making his decision to purchase advertisements from Facebook. 14 95. Plaintiff Maxwell ran nationwide campaigns. 15 96. Plaintiff Maxwell wishes and intends to purchase additional advertisements from 16 Facebook in the future. However, if Facebook continues to inflate its Potential Reach and Estimated 17 Daily Results Reach, it will be difficult for Plaintiff Maxwell to trust Facebook's representations about 18 the Potential Reach and Estimated Daily Results Reach of Plaintiff's Facebook advertisements or other 19 statistics provided by Facebook about Facebook advertisements. 20 CLASS ALLEGATIONS 21 97. Plaintiffs re-alleges and incorporates by reference herein all of the allegations 22 contained above. 23 98. Pursuant to the Federal Rule of Civil Procedure 23(b)(3), Plaintiff asserts claims on 24 behalf of the following "Class": All persons or entities who, from January 1, 2013, to the present 25 ("Class Period"), had an account with Facebook, Inc., and who paid for placement of advertisements 26 on Facebook's platforms, including the Facebook and Instagram platforms. Excluded from the Class 27 are Defendant, any entity in which Defendant has a controlling interest, and Defendant's officers, 28 20 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 directors, legal representatives, successors, subsidiaries, and assigns. Also excluded from the Class is 2 any judge, justice, or judicial officer presiding over this matter and the members of their immediate 3 families and judicial staff. 4 99. This action has been brought and may properly be maintained as a class action as it 5 satisfies the numerosity, commonality, typicality, adequacy, and superiority requirements of Rule 6 23(b)(3). Plaintiffs seek to represent an ascertainable Class, as determining inclusion in the class can 7 be done through Facebook's own records. 8 100. Plaintiffs reserve the right to amend the Class definition if discovery and further 9 investigation reveal that the Class should be expanded, divided into subclasses, or modified in any 10 other way. 11 101. Although the precise number of Class members is unknown and can only be 12 determined through appropriate discovery, Plaintiffs believe, and on that basis alleges, that the 13 proposed Class is so numerous that joinder of all members would be impracticable as Facebook sells 14 millions of advertisements annually to hundreds of thousands or even millions of advertisers. 15 102. Questions of law and fact common to the putative Class predominate over questions 16 affecting only individual members, including inter alia: 17 a. Whether Facebook made material misrepresentations about its advertising services, 18 including misrepresenting its Potential Reach; and 19 b. Whether Facebook breached its contractual duty to perform competently and with 20 reasonable care by providing its inflated Potential Reach. 21 103. Plaintiffs are members of the putative Class. The claims asserted by Plaintiffs in this 22 action are typical of the claims of the members of the putative Class, as the claims arise from the 23 same course of conduct by the Defendant and the relief sought is common. 24 104. Plaintiffs will fairly and adequately represent and protect the interests of the members 25 of the putative Class, as their interests are coincident with, and not antagonistic to, the other members 26 of the putative Class. 27 105. Plaintiffs have retained counsel competent and experienced in both consumer 28 21 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 protection and class action litigation. Plaintiffs' counsel has experience litigating some of the largest 2 and most complex consumer class actions, including numerous consumer class actions in the 3 Northern District of California. 4 106. Certification of the Class is appropriate pursuant to Fed. Rule of Civil Procedure 5 23(b)(3) because questions of law or fact common to the respective members of the Class 6 predominate over questions of law or fact affecting only individual members. This predominance 7 makes class litigation superior to any other method available for the fair and efficient adjudication of 8 these claims including consistency of adjudications. Absent a class action it would be highly unlikely 9 that the members of the Class would be able to protect their own interests because the cost of 10 litigation through individual lawsuits might exceed the expected recovery. 11 107. A class action is a superior method for the adjudication of the controversy in that it 12 will permit a large number of claims to be resolved in a single forum simultaneously, efficiently, and 13 without the unnecessary hardship that would result from the prosecution of numerous individual 14 actions and the duplication of discovery, effort, expense, and the burden of the courts that individual 15 actions would create. 16 108. In the alternative, the Class should be certified pursuant to Federal Rule of Civil 17 Procedure 23(b)(2) because: 18 a. The prosecution of separate actions by the individual members of the proposed class 19 would create a risk of inconsistent adjudications, which could establish incompatible 20 standards of conduct for Facebook; 21 b. The prosecution of individual actions could result in adjudications, which as a 22 practical matter, would be dispositive of the interests of non-party class members or 23 which would substantially impair their ability to protect their interests; and 24 c. Facebook has acted or refused to act on grounds generally applicable to the proposed 25 Class, thereby making appropriate final and injunctive relief with respect to the 26 members of the proposed Class as a whole. 27 28 22 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 FIRST CAUSE OF ACTION CALIFORNIA UNFAIR COMPETITION LAW, 2 CAL. BUS. & PROF. CODE § 17200, et seq. 38 3 109. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 4 above. 5 110. Facebook violated California's Unfair Competition Law (UCL), Cal. Bus. & Prof. 6 Code §17200 et seq., by engaging in the fraudulent and unfair business acts and practices alleged 7 previously, and as further specified below. 8 111. Facebook's misrepresentation of the Potential Reach of advertisements constitutes a 9 fraudulent practice under the UCL, as it deceived Class members into believing that their 10 advertisements could potentially reach more people than their advertisement could actually reach. 11 112. Facebook fails to disclose to advertisers the extent to which the Potential Reach 12 statistic is inflated. This omission constitutes a fraudulent practice under the UCL, as it deceived 13 Class members into believing that their advertisements could potentially reach more people than their 14 advertisement could actually reach. 15 113. Facebook's failure properly to audit and verify the accuracy of its Potential Reach 16 statistics before disseminating them to Class members is unethical, unscrupulous, and substantially 17 injurious to advertising purchasers, and thus constitutes an unfair practice under the UCL. The harm 18 these practices caused to Plaintiffs and the Class members outweigh their utility, if any. 19 114. Facebook should have known that its Potential Reach was inaccurate and inflated, and 20 had Facebook properly audited and verified its Potential Reach, it would have known that the 21 Potential Reach is inaccurate and inflated. The Potential Reach inflation would have been caught by 22 a reasonable auditing and verification process. 23 115. Facebook's failure to employ reasonable auditing and verification procedures gives it 24 an unfair competitive advantage, as it allowed Facebook to provide advertising services at a lower 25 26 27 38 Pursuant to Facebook's terms of service, the laws of the State of California govern "any claim" that arises between Facebook and its users, "without regard to conflict of law provisions." Facebook, 28 Statement of Rights and Responsibilities, https://www.facebook.com/terms (last accessed: June 17, 2019). 23 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 cost and made those advertising services appear to be more effective than they were. 2 116. Plaintiffs have standing to bring these claims under the UCL because they were 3 injured and lost money or property, including but not limited to money paid for Facebook 4 advertisements, as a result of Facebook's fraudulent and unfair business practices. Among other 5 things, Plaintiffs would not have bought as much advertising services if Facebook had not 6 disseminated an inflated Potential Reach statistic, and Plaintiffs would have paid a lower price for the 7 advertising services they did purchase. 8 117. Pursuant to Cal. Bus. & Prof. Code § 17203, Plaintiffs seek equitable relief to prevent 9 the continued use of Facebook's unfair and fraudulent practices and to restore to the Class all money 10 Facebook may have acquired by means of its fraudulent and unfair business practices. 11 SECOND CAUSE OF ACTION 12 BREACH OF CONTRACT 13 118. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 14 above. 15 119. During the class period, Plaintiffs and Class members contracted with Facebook to 16 provide them with advertising services, which included the provision of Potential Reach and 17 Estimated Daily Results Reach. 18 120. The relevant terms of the contract include the Potential Reach and Estimated Daily 19 Results Reach, which are set forth on consecutive Ads Manager pages where advertisers input 20 information (including selecting a budget and schedule) at the point of purchase. See Exhibit 1 21 (consecutive pages on Ads Manager that state the Potential Reach and Estimated Daily Results Reach 22 metrics). 23 121. In addition, at all material times, the parties were acting pursuant to an established 24 course of dealing, course of performance and usage of trade. Pursuant to the contract and the ongoing 25 practice and normal course of dealing between the parties, Facebook provided Potential Reach and 26 Estimated Daily Results Reach metrics to Plaintiffs at their point of purchase through the Ads 27 Manager page. 28 122. Plaintiffs and Class members performed all or substantially all of their contractual 24 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 obligations, including submitting their advertising for Facebook's approval and paying for 2 Facebook's advertising services. 3 123. Facebook breached the contract by providing inflated Potential Reach and Estimated 4 Daily Results Reach metrics to Plaintiffs and Class members, thereby providing advertising services 5 with less Potential Reach and Estimated Daily Reach than stated in the parties' contracts. 6 124. As a direct and proximate result of Facebook's inflated Potential Reach and Estimated 7 Daily Reach Results, Plaintiffs and Class members did not receive the full benefit of their bargain, 8 and instead received advertising services that were less valuable that what they paid for. Plaintiffs and 9 Class members were damaged in an amount at least equal to this overpayment. 10 125. Accordingly, Plaintiffs and Class members have been injured as a result of Facebook's 11 breach of contract and are entitled to damages and/or restitution in an amount to be proven at trial. 12 THIRD CAUSE OF ACTION 13 QUASI-CONTRACT CLAIM FOR RESTITUTION 14 126. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 15 above. 16 127. Plaintiffs seek restitution in quasi contract, in the alternative, in the event that the trier 17 of fact ultimately determines that a contract did not exist between Plaintiffs and Facebook. 18 128. Facebook's inflated Potential Reach made advertising on its platform appear more 19 effective and valuable than it really was—leading Plaintiffs and the Class to pay more money to 20 Facebook for advertising services than they otherwise would have paid. 21 129. Facebook knew about, accepted, and benefited from Plaintiffs' and Class members' 22 purchase of these advertising services. 23 130. Under the circumstances, it would be inequitable for Facebook to benefit from its 24 inaccurate and inflated Potential Reach calculation and its persistent failure to correct the error. 25 131. To avoid injustice, Plaintiffs and the Class accordingly seeks restitution and/or 26 disgorgement of profits in an amount to be proven at trial. 27 28 25 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 FOURTH CAUSE OF ACTION 2 BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 3 132. Plaintiffs re-allege and incorporate by reference herein all of the allegations contained 4 above. 5 133. Plaintiffs and Class members contracted with Facebook to provide them with 6 advertising services. 7 134. These contracts were subject to implied covenants of good faith and fair dealing that 8 all parties would act in good faith and with reasonable efforts to perform their contractual duties (both 9 explicit and fairly implied) and not to impair the rights of other parties to receive the rights, benefits, 10 and reasonable expectations under the contracts. These included the covenants that Facebook would 11 act fairly and in good faith in carrying out its contractual obligations to provide Plaintiffs and Class 12 members with accurate Potential Reach and Estimated Daily Reach of Plaintiffs and Class members' 13 advertising. 14 135. Facebook did not act in good faith and fair dealing to provide Plaintiffs and Class 15 members with accurate Potential Reach and Estimated Daily Reach of Plaintiffs and Class members' 16 advertising. For example, instead of implementing a reasonable process to ensure the accuracy of its 17 Potential Reach and Estimated Daily Reach, Confidential Witness 3 explained that Facebook 18 primarily relied on ad hoc written complaints from Facebook users and ineffective algorithms to 19 assure accuracy. 20 136. Plaintiffs and Class members met all or substantially all of their contractual 21 obligations, including submitting their advertising for Facebook's approval and paying for 22 Facebook's advertising services. 23 137. Facebook's failure to act in good faith in providing accurate Potential Reach and 24 Estimated Daily Reach denied Plaintiffs and Class members the full benefit of their bargain. Plaintiffs 25 and Class members received advertising services that were less valuable than what they paid for and 26 less valuable than their reasonable expectations under the contracts. Plaintiffs and Class members 27 were damaged by an amount at least equal to this overpayment. 28 138. Accordingly, Plaintiffs have been injured as a result of Facebook's breach of the 26 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 covenant of good faith and fair dealing and are entitled to damages and/or restitution in an amount to 2 be proven at trial. 3 PRAYER FOR RELIEF 4 WHEREFORE, Plaintiffs Danielle A. Singer, Project Therapy, LLC (d/b/a Therapy Threads), 5 Holly Dean, DZ Reserve, and Cain Maxwell, on behalf of themselves and the Class, seek the 6 following relief: 7 A. An order certifying this action as a class action under Fed. R. Civ. P. 23, defining the 8 Class as requested herein, appointing Geoffrey Graber of Cohen Milstein Sellers & Toll PLLC, as 9 Class Counsel, and finding that Plaintiffs are proper representatives of the Class requested herein. 10 B. Plaintiffs request injunctive relief. Awarding injunctive and other equitable relief as is 11 necessary to protect the interests of the Class, including: (i) an order prohibiting Facebook from 12 engaging in the wrongful acts described herein; (ii) requiring Facebook to engage third-party auditors 13 to conduct audits and evaluations of Facebook's purported user base and its Potential Reach, and 14 ordering them to promptly correct any problems or issues detected by these auditors, and (iii) 15 requiring Facebook to disclose any further inaccuracies with respect to its user base in a timely and 16 accurate manner. 17 C. Plaintiffs also request damages, restitution, attorneys' fees, statutory costs, and such 18 other and further relief as is just and proper. Plaintiffs seek attorneys' fees under California Code of 19 Civil Procedure 1021.5. 20 JURY TRIAL DEMAND 21 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiffs hereby demand trial by 22 jury in this action of all issues so triable. 23 DATED: June 17, 2019 Respectfully submitted, 24 By: /s/ Geoffrey Graber 25 Geoffrey Graber 26 ANDREW N. FRIEDMAN (admitted pro hac vice) 27 afriedman@cohenmilstein.com GEOFFREY GRABER (SBN 211547) 28 ggraber@cohenmilstein.com 27 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978 8 1 ERIC KAFKA (admitted pro hac vice) ekafka@cohenmilstein.com 2 JULIA HORWITZ (admitted pro hac vice) 3 jhorwitz@cohenmilstein.com COHEN MILSTEIN SELLERS & TOLL PLLC 4 1100 New York Ave. NW, Fifth Floor Washington, DC 20005 5 Telephone: (202) 408-4600 Facsimile: (202) 408-4699 6 Counsel for Plaintiffs and Proposed Class 7 CHARLES REICHMANN (SBN 206699) Charles.reichmann@gmail.com 8 LAW OFFICES OF CHARLES REICHMANN 9 16 Yale Circle Kensington, CA 94708-1015 10 Telephone: (415) 373-8849 11 MICHAEL RAPP (pro hac vice forthcoming) mr@kcconsumerlawyer.com 12 STECKLEIN & RAPP 748 Ann Ave. 13 Kansas City, KS 66101-3014 Telephone: (913) 703-5354 14 REUBEN D. NATHAN (SBN 208436) 15 rnathan@nathanlawpractice.com NATHAN & ASSOCIATES, APC 16 2901 W. Coast Hwy., Suite #200 17 Newport Beach, CA 92663 Telephone: (949) 270-2798 18 Additional Counsel for Plaintiffs 19 20 21 22 23 24 25 26 27 28 28 SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT Case No.: 3:18-cv-04978