A second click-fraud lawsuit filed against Google in Northern California will proceed despite last week’s proposed $90 million settlement in an Arkansas click-fraud case, attorneys said Friday.
Lawyers representing the plaintiffs in AIT v. Google will proceed with their efforts to win class-action status for their lawsuit against the Mountain View CA-based search company for not taking sufficient steps to prevent bogus clicks on paid search ads, thereby costing advertisers money. Advanced Internet Technology, a Web-hosting and domain name firm, took over the lead in the case from click auditing firm Click Defense in December 2005.
Late last Wednesday, it was revealed that Google had proposed a settlement in a class-action lawsuit filed in Arkansas state court by Lane’s Gifts and Collectibles. That proposed settlement, worth $90 million, must be approved first by the judge in that case and then by the class.
The AIT suit, filed in June 2005, is scheduled to come up for class certification before a U.S. District Court judge in the Northern District of California on May 13. And attorneys representing those plaintiffs say winning class-action status in that case before the Arkansas settlement is adopted would make the Lane’s settlement inapplicable to their clients.
“The U.S. District Court may end up certifying a nationwide class in our case before the settlement can be finally approved in Arkansas,” said Darren Kaplan, a partner with Chitwood Harley Harnes LLP, one of the firms representing Google AdWords customers in the AIT suit. “If we are successful in certifying a class in our case, the proposed settlement in Arkansas will not resolve anything.”
Some details of the proposed settlement have been kept under wraps pending the decision of the Arkansas court, and attorneys in the AIT case pointed out that they are basing their decision to proceed on incomplete information.
“Since the announcement [of the proposed Arkansas settlement] provided little information as to the terms and conditions of the settlement, it is impossible to fairly evaluate the proposed settlement and to determine whether it is a good result for the class,” said Brian Kabateck, partner with Kabateck Brown Kellner LLP, another law firm for the plaintiffs. “Once we learn more, we will decide what, if anything, we are prepared to do in order to protect the interests of the Google customers we represent.”
Other lawyers and legal experts, including the lawyers representing plaintiffs in the Arkansas case, have said that approval of the settlement might preclude any other class-action suit against Google for click fraud.
Defendants in the Arkansas case include Yahoo!, AOL, Lycos, Ask.com, LookSmart, Miva and Go.com. Many of those will probably be covered by a settlement in the case, since they were simply distributing ads on their Web pages that had been placed by Google. But Yahoo! and Miva would not be included in a settlement.
Yahoo! said when the Google settlement was announced that it planned to defend itself in the lawsuit. Stephen Malouf, one of the class lawyers in the Lane’s case, said on Friday that plaintiff’s attorneys are in the middle of discovery disputes with Yahoo! for data in the case. “Over the next 60 to 90 days the court will make decisions on what exactly Yahoo! is going to have to produce to us in the way of discovery,” he told CNBC. “At that point, we’ll have a better handle on whether the case will ultimately end up going to trial.”
Malouf added that he hoped the terms of the Google settlement will be made public in the next two to three weeks. When that occurs, he said, “People will recognize that the evaluation of the reasonableness of the settlement is not based simply on what we think but will be based on hard evidence that Google will cooperate in producing to the court.”
