The U.S. Supreme Court will not review Google's appeal of a decision by the Ninth Circuit Court of Appeals that had granted class-action status to a lawsuit claiming the company misled thousands of California advertisers.
The court's refusal June 6 to consider Google's petition means the case could move ahead as a class-action suit as decreed by the appellate court last year.
The lawsuit involves online ads placed via Google's Adwords advertising service between 2004 and 2008. Adwords is a service that Google offers, which allows advertisers to bid for and place ads in search results when someone uses a specific keyword or phrase, or on Websites that might contain keywords of interest to the advertiser.
The program gives advertisers a way to specify when and to whom their ads should be delivered based on keywords, the maximum amount they are willing to pay for placing the ad and their total overall budget for a campaign. When signing up for the service, advertisers have the opportunity to indicate the category of Websites on which they would like their ads to be displayed. But they do not always know all the places where their online ads will end up actually getting placed.
The lawsuit, filed in 2008, accused Google of deliberately not informing advertisers that their ads could end up getting placed on domains that were still only under development, or on error pages that might have happened to contain keywords pertinent to the advertiser. The plaintiffs argued that advertisers ended up paying more than they should have for ads placed on such low-value sites and demanded restitution from Google.
The U.S. District Court for the Northern District of California, which first heard the case, refused to grant the plaintiffs the class-action status they wanted for the lawsuit. The court held that any potential claims that advertisers might have had against Google were individualized and specific to their situations and could not be lumped together into a single class action against the company.
Upon appeal, the appellate court for the Ninth Circuit overturned the lower court's decision and held that the injuries claimed by the plaintiffs had enough in common to justify class-action status. In a 21-page ruling last September, the appeals court reversed the denial of class certification and remanded the case back to the district court. It was Google's request to review the Ninth Circuit's ruling, which the Supreme Court declined to consider this week.
Google has claimed that the appellate court's decision in the case would make it easier to file class-action lawsuits in the Ninth Circuit court's jurisdiction than in another jurisdiction in the country. The company has argued that the court's interpretation of the law paves the way for class-action damages to be based on "generalized proof, derived from the average experience of class members," rather than on actual damages suffered by members of a class.
It is a position that has garnered some support from others as well. Technology giant Intel, for instance, has filed an amicus brief in the case supporting Google's position. Like Google, Intel too has argued that the Ninth Circuit's reasoning in certifying a class is dangerous and could create a situation where financially crippling lawsuits could be brought against large companies by plaintiffs who suffer little to no injuries.
"The Ninth Circuit has directed the district court to certify an immense plaintiff class of hundreds of thousands of advertisers who purchased millions of different Google ads over nearly four years—including untold class members with no legal injury at all," Intel noted in its brief. Allowing a class action to proceed in a situation where not everyone suffered any injury is also unconstitutional, the chip maker argued.
The Pacific Legal Foundation, a public interest legal organization in California, also filed a brief in support of Google in the case.