The Supreme Court yesterday rejected Google Inc.’s appeal to toss out a class-action lawsuit by advertisers who claim it misled them about their internet ad placements in what is being called a win for small businesses.
The justices let stand a September ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals that enabled the class-action lawsuit by hundreds of thousands advertisers to proceed in a California district court.
The Supreme Court’s decision is an overdue victory for small businesses and consumers, said Medford attorney Robert Bonsignore, who said class actions are intended to allow common issues to be decided in a way that’s affordable to the parties and efficient for courts.
“The class mechanism was used here to dispose of common legal and factual questions,” he said. “(Google’s) sour-grapes response was to ask the court to approve the flooding of the system with hundreds of thousands of individual claims that would re-litigate the same basic facts and law over and over. That is a terrible waste of our tax dollars (and) court resources.”
The advertisers used Google’s AdWords service — primarily aimed at placing ads next to relevant Google search results — between 2004 and 2008, and said Google should’ve disclosed that their ads also would be displayed on “low quality” websites. The advertisers are seeking millions of dollars in damages.
Google has made some additional disclosures to advertisers since the case was filed in 2008, according to Noah Schubert, the San Francisco attorney representing advertisers. Its most “egregious” conduct was from 2004 to 2009, when it didn’t let advertisers opt out from advertising on error pages and undeveloped websites known as parked domains, he said.
“We really see these as essentially garbage websites and link farms,” Schubert said. “They really provided no benefit to advertisers.”
A spokesman for Mountain View, Calif.-based Google, owned by Alphabet Inc., said the company doesn’t comment on pending litigation. Google’s digital ad network — the world’s largest — generated $67 billion in revenue last year.
A federal district court judge in 2012 had ruled the advertisers’ case could not move forward as a class action partly because each advertiser potentially would receive different damages, as each paid different sums for their ads. The appeals court reversed the ruling, approving use of a formula to calculate harm based on the average advertiser’s experience, which prompted Google to ask the Supreme Court to intervene.
Herald wire services contributed to this report