San Francisco Comprehensive Tours v. Groupon Amended Complaint

8/6/2019 San Francisco Comprehensive Tours v. Groupon Amended Complaint

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OTCHETT,PITRE&MCCARTHY,

LLP

______________________________________________________________________________CLASS ACTION AMENDED COMPLAINT FOR INJUNCTIVE RELIEF

AND DAMAGES

STEVEN N. WILLIAMS (# 75489)[email protected] F. MOCK (# 249379)[email protected], PITRE & McCARTHY, LLPSan Francisco Airport Office Center840 Malcolm Road, Suite 200

Burlingame, CA 94010Telephone: (650) 697-6000Facsimile: (650) 697-0577

WILLIAM F. MURPHY (# 82482)ANGEL R. SEVILLA (# 239072)DILLINGHAM & MURPHY225 Bush Street, 6th FloorSan Francisco, California 94104-4207Telephone: (415) 397-2700Facsimile: (415) 397-3300

Attorneys for PlaintiffSan Francisco Comprehensive Tours, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO COMPREHENSIVETOURS, LLC dba SAN FRANCISCO

SHUTTLE TOURS and WINE COUNTRYTOUR SHUTTLE, on behalf of itself andall others similarly situated,

Plaintiff,

V.

GROUPON, INCORPORATED ANDDOES 1-20, INCLUSIVE,

Defendants.

))

)))))))))))))

CASE NO. CV 11-1300

CLASS ACTION AMENDEDCOMPLAINT FOR INJUNCTIVERELIEF AND DAMAGES

[JURY TRIAL DEMANDED]

Case4:11-cv-01300-PJH Document11 Filed04/19/11 Page1 of 37


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_______________________________________________________________________________CLASS ACTION AMENDED COMPLAINT FOR INJUNCTIVE RELIEF

AND DAMAGES i

TABLE OF CONTENTS

Page(s)

JURISDICTION AND VENUE .................................................................................................... 1

THE PARTIES............................................................................................................................... 2

CLASS ALLEGATIONS .............................................................................................................. 3

HOW GOOGLE'S ADWORDS PROGRAM WORKS ................................................................ 4

GROUPON'S MANIPULATION OF THE SYSTEM .................................................................. 6

FIRST CAUSE OF ACTIONVIOLATION OF THE LANHAM ACT ......................................................................... 11

SECOND CAUSE OF ACTIONVIOLATION OF BUSINESS AND PROFESSIONS CODE 17500 ........................... 14

THIRD CAUSE OF ACTIONVIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE 17200 ............................................................................................................................ 15

FOURTH CAUSE OF ACTIONINTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE ..................... 17

PRAYER FOR RELIEF .............................................................................................................. 18

DEMAND FOR JURY TRIAL ................................................................................................... 19



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AND DAMAGES 1

Plaintiff SAN FRANCISCO COMPREHENSIVE TOURS, LLC dba SAN

FRANCISCO SHUTTLE TOURS and WINE COUNTRY TOUR SHUTTLE (San Francisco

Comprehensive Tours or Plaintiff), individually and on behalf of the Class described below,

brings this class action for damages and injunctive relief and hereby demands a trial by jury.

This action is based upon Plaintiffs own investigation and the reasonable investigation of

counsel.

This is an action in which Plaintiff San Francisco Comprehensive Tours and the Class

seek injunctive (and other) relief to stop, prevent, and remedy false and misleading business and

advertising acts and practices, essentially bait and switch advertising, employed on

Google.com by defendant GROUPON, INCORPORATED

JURISDICTION AND VENUE

(Groupon or Defendant).

1. Plaintiff SAN FRANCISCO COMPREHENSIVE TOURS, LLCFrancisco Shuttle Tours and dba Wine Country Tour Shuttle, is a California limited liability

company. San Francisco Comprehensive Tours principal place of business is in San Francisco,

California.

, dba San

2. Plaintiff and the Class is informed and believes and on that basis alleges andavers that defendant Groupon is incorporated in the State of Delaware, and has its principalplace of business in Chicago, Illinois.

3. This Court has subject matter jurisdiction over this action based on federalquestion jurisdiction, without regard to the amount in controversy, pursuant to 28 U.S.C. 1331

in that Plaintiff San Francisco Comprehensive Tours and the Class assert a claim for false

advertising by defendant Groupon under the Lanham Act, 15 U.S.C. Section 1125(a)(1)(B).

This Court also has subject matter jurisdiction over this action pursuant to 28 U.S.C. Section

1332, in that Plaintiff San Francisco Comprehensive Tours is deemed to be a citizen of the State

of California because it is incorporated in and has its principal place of business in the State of

California, and defendant Groupon is deemed to be a citizen of its State of incorporation (which

is a State other than California) and a citizen of the State of Illinois, where it has its principal



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AND DAMAGES 2

place of business. The amount in controversy in this action, exclusive in interest and costs,

exceeds $75,000.00.

4. Venue of this action is proper in this Court in that the injury to Plaintiffsbusiness caused by Defendants wrongful conduct occurred and continues to occur in this

judicial district, and is also proper in this Court because Defendants liability to Plaintiff San

Francisco Comprehensive Tours and the Class arose and continues to arise in this judicial

district.

THE PARTIES

5. Plaintiff San Francisco Comprehensive Tours has been offering tours of SanFrancisco, John Muir Woods, and the Northern California Wine Country since its inception in

2005. To the best of its knowledge, it is the only San Francisco city tour service combining a

bus tour, short guided walking tours, and a Ferry/Bay cruise to Sausalito. San Francisco

Comprehensive Tours marketing strategy is heavily dependent on the internet and the ability of

potential customers such as tourists from outside the San Francisco Bay Area to locate it via

internet searches on popular search engines such as Google.com (Google).

6. Plaintiff San Francisco Comprehensive Tours is informed and believes and onthat basis alleges and avers that defendant Groupon is a deal-of-the-day website that is localizedto major geographic markets worldwide. As a deal-of-the-day website, Groupon prominently

features a new coupon from a different advertiser each day (along with a few other less

prominent discount offers, which also change on a daily basis). Launched in November 2008,

the first market for Groupon was Chicago

/ / /

, followed soon thereafter by other cities, including but

not limited to San Francisco. Plaintiff and the Class are informed and believe that Groupon

currently serves more than 150 markets in North America and 100 markets in Europe, Asia and

South America and has amassed 35 million registered users. In December 2010 it publicly

turned down an offer from California-based Google to acquire Groupon for a sum in excess of

$5 billion.



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AND DAMAGES 4

12. A Class action is superior to other methods for the fair and efficient adjudicationof this controversy. Treatment as a Class action will permit a large number of similarly situated

persons to adjudicate their common claims in a single forum simultaneously, efficiently, and

without the duplication of effort and expense that numerous individual actions would engender.

13. Class treatment will also permit the adjudication of relatively small claims bymany Class members who otherwise could not afford to litigate a false advertisement claim such

as is asserted in this complaint. This Class action presents no difficulties in management that

would preclude maintenance as a Class action. Finally, the Class is readily definable.

14. Plaintiff and the Class have retained counsel experienced in complex Class actionlitigation. Counsel for the Class will vigorously assert the claims of the Class members.

HOW GOOGLES ADWORDS PROGRAM WORKS

15. A user of a search engine such as Google receives two kinds of results from aGoogle search. The first kind of result from a Google search is an informational display of links

ranked by the search engine in terms of how closely it appears to correspond with the users

search terms. The user can click through the displayed links, and the operator of the website

associated with the displayed link is not charged by the search engine. The second kind of result

from a Google search is purchased placement of an advertisers link. These purchasedplacements usually appear above the informational search results on the first page of the search

results, and alongside the informational display of links on the first page of the search results.

16. Most searches on search engines such as Google produce many, many pages ofinformational search results. However, users will not typically view every page of a 20-page

search result before selecting particular websites to visit that appear to correspond to their

search. Internet advertisers and marketers accordingly strive to appear on the first page of a

users search relevant to their businesses, because users are believed to be more likely to click

through to a users landing page (a landing page is the first page a user is taken to after

clicking through a link) if the advertisers link appears on that first page.

17. To address this need, Google operates an advertising auction service programknown as AdWords. Participants in this program, usually online marketers and advertisers such



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AND DAMAGES 5

as Plaintiff, draft short advertisements known as AdWords which include a headline and an

ad excerpt (see Exhibit A for a sample).

18. However, consumers seeking to purchase products and services from AdWordsadvertisers are not led to an ad on a Google Search Results page based upon the actual content

of the ad. Instead, when a consumer searches for a product or service, Google displays ads

whose keywords match the users search terms. Therefore, advertisers select keywords that

they believe will best match the search terms that consumers use.

19. When a users Google search matches the advertisers selected keywords, Googledisplays those AdWords advertisements that are ranked by Google as matching the search

request most closely at the top of the list of search results, and others (ranked by Google lower

in terms of a match, but still a match) on the right side of the screen alongside the search results.

20. AdWords is an advertising auction service, and advertisers bid for favorable adposition by setting the maximum they are willing to pay for each click-through for their

keywords. Google calls the amount advertisers pay each time a user clicks on their ad the Cost-

per-click bid or CPC. The amount actually paid is established by advertisers, such as Plaintiff,

Class Members, and defendant Groupon, by bidding on the maximum price they are willing to

pay for each Cost-per-click bid.

21. As indicated, Google applies other criteria in order to establish the order that theads are listed. Therefore the highest bidder is not necessarily the advertiser who will be ranked

most highly on a given users search results page. Instead, Google ranks responsive advertisers

using a combination of: (a) the amount of the dollar bid; (b) the relevance of the responsive

advertisers ad words to the users search (e.g., if a user searched Google for left-handed

monkey wrenches, a link stating that the advertiser sells left-handed monkey wrenches

would be ranked more highly, all other things being equal, than a link stating only that the

advertiser sells monkey wrenches of all kinds); (c) the popularity of the website measured in

the number of click-throughs it receives from users who search for that advertisers keywords,

versus the number of click-throughs received by other advertisers using the same keywords; and

(d) how closely the advertisers landing page (i.e., the first page on which a user who clicks



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AND DAMAGES 6

the advertisers link lands after clicking through) matches the users search. Google advises that

factor (b) is given more weight than factor (c), which in turn is given more weight than factor

(d).

22. An online explanation of the Google ad auction process appears at:http://www.youtube.com/watch?v=K7l0a2PVhPQ

23. In accordance with the AdWords system and Googles description, an advertiserwhose ad is more closely aligned with a particular users search terms will be able to bid less for

a favored ad placement than an advertiser whose ad is less-closely aligned with the same search

terms. However the AdWords program also rewards demonstrated popularity (i.e., high click-

through rates). Therefore, a Groupon advertisement offering a 90% discount on San Francisco

tours, but that does not actually offer the 90% discount (or the tours), may receive a higher

ranking than any other tour advertiser based upon the greater number of click-throughs that are

generated by the false 90% coupon offer.

.

24. Since approximately August of 2005, plaintiff San Francisco ComprehensiveTours has participated in Googles AdWords program. From the beginning of its participation

until approximately the Fall of 2010 (when Plaintiff first noticed that defendant Groupon was

promoting San Francisco Bay Area businesses), Plaintiffs participation in the Google program

was satisfactory and cost effective. Plaintiffs link was consistently displayed in one of the top

3-4 spots on the Google search results page when users searched for San Francisco Tours,

Alcatraz Tours, and Napa Wine Tours. Users who clicked through Plaintiffs AdWords

link were taken directly to Plaintiffs landing page which was its website where users could

review and reserve Plaintiffs tours of San Francisco, including Alcatraz Tours, or Bay Area

Wine Country Tours.

GROUPONS MANIPULATION OF THE SYSTEM

25. However, beginning in about September of 2010, Plaintiff observed that the costof its click-throughs began to skyrocket, and its ranking in the purchased placement area for

searches including the terms San Francisco Tours, Alcatraz Tours, and Napa Wine Tours

began to decline. At the same time, defendant Groupons AdWords link began to appear at or



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AND DAMAGES 7

near the top of the purchased placement search results for Google searches including the terms

San Francisco Tours, Alcatraz Tours, and Napa Wine Tours.

26. Defendant Groupon, however, only offers discount coupons, typically, a differentmajor discount to a single different business in the San Francisco Bay Area each day (along with

some less-prominent other offers). On most if not all days of the year, although defendant

Groupon uses the keywords San Francisco Tours, Alcatraz Tours, Alcatraz Tickets, and

Napa Wine Tours it did not offer any such tours or even coupons for such tours. After

Plaintiff wrote to Groupon raising the issues addressed in this Complaint, Plaintiff noticed that

Groupon began offering a one-day on a tour in the Bay Area, albeit infrequently. However,

defendant has never, to Plaintiffs knowledge, offered an Alcatraz Tour or Alcatraz Tickets,

much less at 50-90% off. Similarly, although defendant Groupons AdWord headlines read

San Francisco Tours, Alcatraz Tours, or Napa Wine Tours, and its Groupon ad excerpts

read Its like San Francisco at 90% off and Do Napa at 50-90% off, defendant Groupon,

except for a handful of occasions over the past 6 months, did not offer any such tours at the time

of the search, and nothing in the ad reflected a 90% discount on such tours at the time of the

search.

27. For example, during the week of March 14, 2011, defendant Groupon apparentlybegan using the keywords Alcatraz Tickets, advising consumers in its headline that it was

selling Alcatraz Tickets 1 ridiculously huge coupon a day and informing consumers in its ad

excerpt that they could [d]o Alcatraz CA at 5090% off! [emphasis in original]. See

Exhibit B. On the day in question (March 15, 2011) when defendant Groupon was advising

consumers that it had Alcatraz tickets at 50-90% off, it was in fact featuring a coupon for

discounted acting lessons. That same day, a search for Napa Tour deals found defendant

Groupon offering Napa Tour Deals when in fact it was offering the same discounted acting

class coupon. See Exhibit C.

28. Here are some other examples, retrieved from Google searches conducted onThursday, February 24th, 2011:



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AND DAMAGES 8

Keywords: San Francisco Tours

Groupon Headline: San Francisco Tours

Groupon Ad Excerpt: Its like San Francisco at 90% off

Result after clicking through: No San Francisco Tour offered on associated landing pages.

****

Keywords: Napa Wine Tours

Headline: Napa Wine Tours

Ad Excerpt: Do Napa at 50-90% off

Result after clicking through: No Napa Wine Tour offered on associated landing pages.

****

Keywords: Alcatraz Tours

Headline: Alcatraz Tours

Ad Excerpt: Do Alcatraz CA at 50-90% off

Result after clicking through: No Alcatraz Tour offered on associated landing pages.

29. Below are even more examples retrieved from Google searches conducted onWednesday, March 30, 2011:

Keyword: San Francisco Shuttle Tours

Ad Headline: San Francisco Tour Deals

Ad Excerpt: 1 ridiculously huge coupon per day. Deals like San Fran Tours & More!

Result after clicking through: No San Francisco shuttle tour offered on associated landing

pages.

****

Keyword: Napa Tours

Ad Headline: Napa Tours

Ad Excerpt: 1 ridiculously huge coupon per day. Deals like Napa Tours & More!

Result after clicking through: No San Francisco shuttle tour offered on associated landing

pages.

Keyword: SF Tours



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AND DAMAGES 9

Ad Headline: SF Tours

Ad Excerpt: 1 ridiculously huge coupon per day. Deals like San Fran Tours & More!

Result after clicking through: No San Francisco tour offered on associated landing pages.

****

Keyword: Muir Woods Tours

Ad Headline: Muir Woods Tours

Ad Excerpt: 1 ridiculously huge coupon per day. Do Muir Woods CA at 50-90% off!

Result after clicking through: No Muir Woods tour offered on associated landing pages.

30. In addition, the display URLs (the URL displayed in an ad to identify theadvertisers site to users) appearing in defendant Groupons ad excerpts are inaccurate and

improperly enhance the relevance of Groupons ad by falsely representing that Groupon has a

web page addressing the search term(s) in question. For example, on March 16, 2011,

defendant Groupons ad excerpt below the headline Napa Tours advised the reader that its

URL was www.groupon.com/Napa. Below defendant Groupons headline Alcatraz Tours 1

ridiculously huge coupon a day the ad excerpt touts a URL at www.groupon.com/Alcatraz

31. Defendant Groupon, by falsely representing to users and consumers in itsheadlines and in its ad excerpts that it provides access to San Francisco Tours, Napa Wine

Tours, Alcatraz Tours, and the like, has induced and continues to induce consumer click-

throughs, and has enhanced its ad rankings on the Google search results pages by falsely

advertising steeply discounted tours.

.

See Exhibit D. But when each of these URLs was accessed, the user lands on a page on

Groupons website that states Oops! That page doesnt exist. The reader is invited to click

through to a particular city, where they will be taken to Groupons real coupon of the day which

except in infrequent circumstance will not be what the user was searching for. See Exhibit E.

32. Defendant Groupon, by falsely suggesting that users who click-through to its admay receive a San Francisco Tour at 90% off or Alcatraz Tours at 50-90% off also

artificially inflates its popularity score: consumers naturally will click on a seemingly relevant

ad offering them 90% off what they are searching for. By lying to consumers in its headlines



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AND DAMAGES 10

and in its ad excerpts, Groupon winds up paying less per click-through than it would normally

have to pay to get the desired ad placement, and Plaintiff and Class members have to pay more.

33. Defendant Groupons conduct has resulted in a drop in plaintiff San FranciscoComprehensive Tours ranking, while Groupons misleading ads frequently are ranked in the

top three positions for advertisers that are offering tours in San Francisco and other cities with

tourist trade. As a result, Plaintiff has been forced to bid more for click-throughs on the

keywords in question.

34. By misleading users and consumers interested in San Francisco Tours andNapa Wine Tours (and others, such as Alcatraz Tours and Alcatraz Tickets) into thinking

that it provides steep discounts for such tours or the tours themselves, defendant Groupon

induces users and consumers to click through to its landing page. This, in turn, lowers

Groupons cost-per-click bid and raises the popularity of defendant Groupons ads, further

cementing its ads placement in top positions on Google search results pages.

35. At the time of the display of the ads set forth in paragraph 18 of this Complaint,the associated Groupon landing pages, and all other reviewable areas of defendant Groupons

website, offered no tours matching the keywords/headlines it displayed in response to Google

searches. Additionally, no active promotions on tours or other goods or services, offered the

advertised "90% off".

36. Instead, the landing page to which a consumer or user is directed after clickingon defendant Groupons AdWords link for the first time requires the user/consumer to (a)

confirm the city or region the consumer is searching, and (b) to give defendant Groupon the

users/consumers email address. Then, and only then, does defendant Groupon reveal to the

user/consumer that it is offering a coupon, in almost all of the occasions a coupon for goods or

services totally unrelated to the keywords the user/consumer used to search Google (e.g., a

coupon for discounted play at a billiards parlor is offered in response to a search for San

Francisco Tours). See Exhibit F.

37. As a result of its false and misleading advertising, in addition to divertingpotential customers from Plaintiff and other legitimate tour sites, defendant Groupon acquires



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AND DAMAGES 11

valuable information about users and consumers email addresses, interests, and geographic

location, all of which is valuable information that can be used as part of a database for later

commercial use or sale.

38. A further result of defendant Groupons false and misleading advertising is thatdefendant Groupon has diverted customers or potential customers from Plaintiff and the Class

and their websites website by means of the same false and misleading factual representations.

39. Plaintiff and the Class have been injured in fact by defendant Groupons falseand misleading advertising, suffering the loss of customers and potential customers who, once

diverted, either give up their search in frustration, or pursue other avenues of advertising or

information to locate tours. Plaintiff and the Class have been further injured in fact because

defendant Groupons false statements in its headlines, its ad excerpts, and even its URLs operate

to make the amount Groupon has to bid to secure an advantageous ad position artificially low

and make the price Plaintiff and the Class have to bid to secure an advantageous ad position

artificially high.

40. Plaintiff and the Class and their businesses face irreparable harm that cannot beremedied by money damages as a result of defendant Groupons unlawful conduct. The

diversion of Plaintiffs and the Class customers and the increased costs imposed on Plaintiffand the Class by defendant Groupons conduct will force Plaintiff and the Class to close their

businesses unless the Court enters injunctive relief requiring Groupon and those acting on its

behalf or in concert with it to cease and desist from employing ad headlines, ad excerpts, and

phony display URLs representing or implying that a product or service or discount thereon is

currently being offered by Groupon or its advertisers when, in fact, such products or services or

coupons thereon are not currently being offered by Groupon or its advertiser.

FIRST CAUSE OF ACTION

VIOLATION OF THE LANHAM ACT

41. Plaintiff and the Class refer to and incorporate herein by reference as though setforth fully herein the allegations contained in Paragraphs 1-28 inclusive of this Complaint.



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AND DAMAGES 13

placement displays for searches such as San Francisco Tours, Napa Wine Tours, and

Alcatraz Tours. Plaintiff and the Class have further been injured and believe that they will

likely continue to be damaged in that defendant Groupons business practices have caused

Plaintiff and Class members to pay higher prices for advertising than they were required to pay

in the absence of Groupons business practices.

47. Consumers are also injured and are likely to continue to be injured by defendantGroupons false and misleading statements and representations of fact. Users who search

Google for San Francisco Tours, Napa Wine Tours, and Alcatraz Tours expecting a

responsive landing page from defendant Groupon instead find themselves hijacked to a landing

page that first demands their geographic location, and then an email address, only to learn

(after they have conveyed this valuable personal information about themselves) that defendant

Groupon is offering no such services. Plaintiff and the Class are informed and believe that

consumer injury ranges from annoyance and frustration at the waste of time to which Groupon

has put them, to a complete abandonment of the Google search.

48. Plaintiff and the Class have no plain, speedy or adequate remedy in moneydamages for the irreparable injuries cause to it by defendants conduct. Plaintiff and the Class

accordingly request the entry of injunctive relief compelling defendant Groupon and thoseacting on behalf of or in concert with it to cease and desist from continuing to use keywords, ad

words, ad excerpts and display URLs in response to Google searches that do not reflect the

actual products and services being offered to the consumer at the time of the users search, and

which do not accurately represent the discounts being offered at the time of the users search.

49. Plaintiff and the Class further request that the Court exercise its discretion toaward attorneys fees to Plaintiff.

Wherefore, Plaintiff and the Class pray for injunctive relief and such money damages as

they are able to prove as set forth in the prayer of this Complaint.

/ / /



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AND DAMAGES 14

SECOND CAUSE OF ACTION

VIOLATION OF BUSINESS AND PROFESSIONS CODE 17500


51. California Business and Professions Code Section 17500 makes it unlawful forany business offering services or other things of value to the public to make or disseminate or

cause to be made or disseminated before the public in this state, * * * in any newspaper or other

publication, or any advertising device, * * * or in any other manner or means whatever,

including over the Internet, any statement, concerning * * * those services, professional or

otherwise, or concerning any circumstance or matter of fact connected with the proposed

performance * * * which is untrue or misleading, and which is known, or which by the exercise

of reasonable care should be known, to be untrue or misleading * * * *.

52. California Business and Professions Code Section 17500 further makes itunlawful to advertise a product or service as part of a plan or scheme with the intent not to sell

the property or services, professional or otherwise, at the price stated therein or as so

advertised.

53.

The conduct of defendant Groupon as alleged in this Complaint violatesCalifornias Business and Professions Code Section 17500, in that defendant has, in its

advertising on Google.com, made at least the following untrue and misleading statements of

fact: (a) that it is offering San Francisco Tours; (b) that it is offering Napa Wine Tours; (c) that

it is offering Alcatraz Tours and/or Alcatraz Tickets; and (d) that it was offering the foregoing

tours at 50%-90% off.

54. The foregoing untrue and misleading statements of fact were known bydefendant to be untrue and misleading at the time they were (and continue to be) displayed on

the internet on Google.com, or with the exercise of reasonable care should have been known to

defendant to be untrue or misleading.

55. The foregoing untrue and misleading statements of fact establish a plan orscheme on the part of defendant Groupon to advertise services, such as San Francisco Tours,



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AND DAMAGES 15

Napa Wine Tours, and Alcatraz Tours with the intent not to sell the services as so

advertised.

56. The foregoing conduct on the part of defendant Groupon has caused plaintiff SanFrancisco Comprehensive Tours and the Class injury in fact, in the form of diversion of

customers and potential customers from its website to the website of defendant Groupon.

57. The foregoing conduct on the part of defendant Groupon is also causing injuryand damage to consumers and users, who are being tricked by defendant Groupon into

providing it with their valuable personal information based on untrue and misleading statements,

and whose legitimate searches for information on the internet are being hijacked by defendant.

58. The conduct of defendant Groupon will, if permitted to continue, causeirreparable harm to plaintiff San Francisco Comprehensive Tours and the Class. Plaintiffs and

the Class only effective remedy is injunctive relief precluding and enjoining defendant

Groupon and those acting for, on behalf, or in concert with it from using AdWords headlines

and keywords and display URLs and ad excerpts that represent a good or a service that Groupon

is not in fact offering to users and consumers at the time of the search, at discounts that Groupon

is not in fact offering to users and consumers at the time of the search.

Wherefore, Plaintiff and the Class pray for injunctive relief as set forth in the prayer ofthis Complaint.

THIRD CAUSE OF ACTION

VIOLATION OF CALIFORNIA BUSINESS & PROFESSIONS CODE SECTION 17200

59. Plaintiff refers to and incorporates herein by reference as though set forth fullyherein the allegations contained in Paragraphs 1-46 inclusive of this Complaint.

60. California's false advertising law prohibits not only advertising which is false,but also advertising which, although true, is either actually misleading or has capacity,

likelihood or tendency to deceive or confuse public. California Business and Professions Code

Section 17200 precludes unfair competition, which means and includes any unlawful, unfair or

fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising * * *

*.



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AND DAMAGES 16

61. The conduct of defendant Groupon as alleged in this Complaint violatesCalifornias Business and Professions Code Section 17200, in that defendant has, in its

advertising on Google.com, made at least the following untrue and misleading statements of

fact: (a) that it is offering San Francisco Tours; (b) that it is offering Napa Wine Tours; (c) that

it is offering Alcatraz Tours and Tickets; and (d) that it was offering the foregoing tours at 50%-

90% off.

62. The foregoing untrue and misleading statements of fact were known bydefendant to be untrue and misleading at the time they were (and continue to be) displayed on

the internet on Google.com, or with the exercise of reasonable care should have been known to

defendant to be untrue or misleading.

63. Defendants conduct constitutes advertising and business practices that areunlawful in that they violate the federal Lanham Act (15 U.S.C. 1125(a)(1)(B)), California

Business and Professions Code 17500 [false advertising], and the California Consumers Legal

Remedies Act, California Civil Code 1770(a)(9) [Advertising goods or services with intent

not to sell them as advertised is unlawful].

64. Defendants conduct also constitutes an unfair business practice within themeaning of California Business and Professions Code Section 17200, in that defendantGroupons false advertising permits it to receive a higher ad placement at an artificially lower

cost-per-click bid on the keywords it purchases, because its relevance and popularity scores are

enhanced by its false statements, and causes competitors to pay artificially higher auction prices.

65. The foregoing conduct on the part of defendant Groupon has caused plaintiff SanFrancisco Comprehensive Tours and the Class injury in fact and loss of money, in the form of

diversion of customers and potential customers from its website to the website of defendant

Groupon and in the form of higher costs for its continued participation in AdWords.

66. The foregoing conduct on the part of defendant Groupon is also causing injuryand damage to consumers and users, who are being tricked by defendant Groupon into

providing it with their valuable personal information based on untrue and misleading statements,

and whose legitimate searches for information on the internet are being hijacked by defendant.



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67. The conduct of defendant Groupon will, if permitted to continue, causeirreparable harm to plaintiff San Francisco Comprehensive Tours and the Class, in that its

money damages from defendants false and misleading advertising may in many instances be

unknown or unprovable. Plaintiff and the Class only effective remedy is injunctive relief

precluding and enjoining defendant Groupon and those acting for, on behalf, or in concert with

it from using AdWords headlines and keywords that represent a good or a service that Groupon

is not in fact offering to users and consumers on the day in question.

68. Plaintiff and the Class further seek to have defendant Groupon disgorge any andall profits it has made as a result of its unlawful, unfair, and fraudulent advertising and business

practices.

Wherefore, Plaintiff and the Class pray for injunctive relief as set forth in the prayer of

this Complaint.

FOURTH CAUSE OF ACTION

INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE


70.

Plaintiff San Francisco Comprehensive Tours has enjoyed a longstanding andsuccessful relationship with users of Google searches, has an established track record of

converting into customers many of those users who search Google using terms such as San

Francisco Tours and Napa Wine Tours, and a high probability of continuing to convert

similar Google users in the future.

71. Defendant Groupon knew that Plaintiff and the Class were using GoogleAdWords to market their tours and were competing with Defendant Groupon for the most

coveted placement of their links through the AdWords auction process.

72. The conduct of defendant Groupon as alleged herein was substantially certain toundermine and interfere with Plaintiffs and the Class prospective business relationships with

Google users by artificially driving Plaintiff and Class members ad placement farther down the

list and thus prevent Plaintiff and Class members from marketing to these users as effectively



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AND DAMAGES 18

and with as much success as it would absent defendants wrongful conduct.

73. The conduct of defendant Groupon, as alleged in this Complaint, wasindependently unlawful.

74. Defendant Groupons conduct was a substantial factor in disrupting Plaintiffsand the Class prospective economic relationship with Google users, causing Plaintiff and the

Class to suffer actual injury.

Wherefore, Plaintiff and the Class pray for injunctive relief as set forth in the prayer of

this Complaint.

PRAYER FOR RELIEF

Wherefore, Plaintiff and the Class pray for relief as follows:

A. That the Court determine that this action may be maintained as a classaction under Rule 23(b)(2) and (b)(3) of the Federal Rules of Civil

Procedure, that Plaintiff be certified as a class representative, and that

Plaintiffs counsel be appointed as counsel for the Class;

B. That Plaintiff and the Class be awarded injunctive relief and such moneydamages as it is able to prove as set forth in the prayer of this Complaint;

C.

For the issuance of preliminary and permanent injunctive relief enjoiningdefendant Groupon and those acting for, on behalf of, or in concert with

defendant Groupon from using AdWords, headlines and keywords and ad

excerpts in response to Google searches that represent a good or a service

that Groupon and its advertisers are not in fact offering to users and

consumers at the time of the search, or at discounts that Groupon and its

advertisers are not in fact offering to users and consumers at the time of

the search;

D. For an award of Plaintiffs attorneys fees and reimbursement of costsbased on Plaintiffs and the Class claims under the Lanham Act and on

its other claim pursuant to California Code of Civil Procedure Section

1021.5;



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E. That Plaintiff and members of the Class be awarded pre-judgment andpost-judgment interest, and that such interest be awarded at the

highest legal rate from and after the date of service of the initial complaint

in this action; and

F. For such other and further relief as is just under the circumstances.

Dated: April 19, 2011. COTCHETT, PITRE & McCARTHY, LLP

By: /s/ Steven N. Williams______________STEVEN N. WILLIAMSMARY F. MOCK

DILLINGHAM & MURPHY, LLPWILLIAM F. MURPHYANGEL R. SEVILLA

Attorneys for PlaintiffSAN FRANCISCO COMPREHENSIVETOURS, LLC

DEMAND FOR JURY TRIAL

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff and the Classdemand a jury trial on all issues permitted to be tried to a jury.

Dated: April 19, 2011. COTCHETT, PITRE & McCARTHY, LLP

By: /s/ Steven N. Williams_____________STEVEN N. WILLIAMSMARY F. MOCK

DILLINGHAM & MURPHY, LLPWILLIAM F. MURPHY

ANGEL R. SEVILLA

Attorneys for PlaintiffSAN FRANCISCO COMPREHENSIVETOURS, LLC



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EXHIBIT A



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EXHIBIT B



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EXHIBIT C



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EXHIBIT E



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San Francisco Comprehensive Tours v. Groupon Amended Complaint

Documents

Transcript of San Francisco Comprehensive Tours v. Groupon Amended Complaint