Web Gambling Advertising Suit Against Search Engines Allowed to Proceed

By John Ottaviani

Business Wire is reporting that Judge Richard Kramer of the San Francisco County Superior Court has denied a motion to dismiss certain of the allegations in a class action lawsuit filed last summer against Google, Yahoo! and other major search engines, for their alleged involvement in the illegal advertisement of Internet gambling.

The complaint alleges that Yahoo!, Google, Overture, Ask Jeeves, LookSmart, AltaVista, Terra Lycos, Jupiter, FindWhat, Kanoodle, Business.com and Sex.com violated California law by providing paid or “sponsored” advertisements in violation of the California Penal Code provisions and the California Unlawful Business Practices Act. Google and Yahoo! reportedly have since abandoned gambling advertisements, but are still subject to the lawsuit for their prior actions.

It is not clear whether the new ruling addressed substantive issues or only went to procedural questions. The plaintiffs are attempting to break new legal ground by taking on online gambling advertising. However, given the recent court rulings expanding the scope of protection under the Communications Decency Act, the search engines should have strong arguments for immunity under Section 230 of the CDA (although the complaint specifically alleges that none of the defendants qualifies for immunity as an “interactive computer service” under Section 230(f)(2), but at best are “information content providers” under the CDA). The search engines also seem to have very strong First Amendment and dormant commerce clause defenses.

It would be very interesting to know if Judge Kramer ruled on the CDA defense. If anyone has a copy of the ruling, we would appreciate it if you would please send it along for us to look at.