U.S. Supreme Court lets Google advertising class action suit proceed

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday let stand a lower court's decision to allow a class action lawsuit against Google Inc to proceed regarding claims that the company deceived California advertisers about the placement of Internet ads through its Adwords service.

The court decided not to hear Google's appeal of a ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals last September that the litigation could move forward as a class action representing advertisers who used the service between 2004 and 2008. Google is part of Alphabet Inc. (O:GOOGL)

A Google spokesman said the company does not comment on pending litigation.

The 2008 lawsuit accused Google of violating California fair advertising laws because it misled advertisers about where the ads would be placed.

The Adwords service was primarily aimed at placing ads next to relevant Google Internet search results. But the plaintiffs said Google should have disclosed that ads would also appear in undesirable places such as error pages and undeveloped websites known as parked domains.

A federal district court judge in 2012 ruled that the case could not move forward as a class action in part because each advertiser would receive different damages. Each advertiser would have paid a different sum for the ads in question, the judge said. The appeals court reversed the district court, prompting Google to ask the Supreme Court to intervene.

Under a 2011 U.S. Supreme Court precedent involving claims brought by employees against Wal-Mart Stores Inc (NYSE:WMT), class actions can move forward only if each plaintiff has a similar claim and that claim can be resolved on a class-wide basis.

The Supreme Court has shied away from taking new class action cases since the death in February of Justice Antonin Scalia, who had authored the 2011 Wal-Mart ruling. Scalia had been a leader of the court's moves in recent years to curb class action litigation, although that trend was not borne out in three class action cases decided during its current term.