KinderStart v. Google Dismissed–With Sanctions Against KinderStart’s Counsel

By Eric Goldman LLC v. Google, Inc., C 06-2057 JF (N.D. Cal. March 16, 2007)

Copy of the opinion dismissing the lawsuit

Copy of the opinion granting sanctions against KinderStart’s counsel Gregory Yu

Google has won big in the lawsuit brought by KinderStart due to their unhappiness with their search engine placement. Not only did Judge Fogel dismiss the complaint without leave to amend (meaning that the case is over unless KinderStart appeals to the Ninth Circuit), but he issued Rule 11 sanctions against KinderStart’s counsel Gregory Yu–meaning that Yu will have to pay some of Google’s legal fees (the amount will be determined later). The substantive result isn’t surprising given the complete lack of merit in the lawsuit from day 1, but the Rule 11 sanctions show, once again, that Google plays hardball against plaintiffs when threatened (it also shows that Judge Fogel doesn’t tolerate nonsense in his courtroom–good for him!).

UPDATE (3/21): I have finally had a chance to digest this very complicated set of opinions. Much of the substantive opinion is highly technical in nature, in that it parses the specific language of the filed complaint, the required elements of a valid complaint, and the judge’s previous instructions when dismissing the complaint last July. As a result, the opinion isn’t all that easy to read, nor is it all that interesting.

Overall, this opinion bears some resemblance to the Langdon and Person lawsuits against Google in that the plaintiff threw a laundry-list of grumbles and kvetches at Google, some of which were completely unrelated (such as KinderStart’s attempt to link the Google Library endeavor with allegedly biased PageRank downgrading). Fortunately, courts are showing little tolerance for this “everything including the kitchen sink” type of pleadings; they are not stringing together disjointed facts to make the unsupported linkages sought by the plaintiffs. I trust that, in the future, plaintiffs with better lawyers will do a better job of getting to the right issues; those may pose more serious challenges for Google than the ones to date.

This opinion is very thoughtful. Judge Fogel did a meticulous job in sorting through a large volume of junk pleadings and other material to dissect the plaintiffs’ arguments and provide legally grounded responses. I spend a lot of time bashing judges on this blog, but opinions like this give me some hope for our judiciary. As taxpayers, we got our moneys’ worth from Judge Fogel’s (and his clerks’) work here.

Five highlights from the opinions:

1) The judge dismissed the antitrust claims for failing to identify an appropriate “relevant market.” However, the judge showed a little sympathy to the possibility that Google may have antitrust exposure, saying “were KinderStart able to identify a relevant market for antitrust purposes, it might be able to allege a dangerous probability of achievement of monopoly power” based on the allegations that (1) Google’s market share gains at the expense of Yahoo and Microsoft, (2) there are barriers to entry based on the investment required and entrenched buyer preferences, and (3) Google’s user dataset may give it advantages over new entrants. I disagree with the concerns about market entry barriers for reasons I discuss here, but there’s no doubt that Google’s impressive market power can’t be ignored.

2) The judge correctly understood that PageRank is an algorithmically generated opinion that can be modified at any time by changing either the data inputs or the algorithm. Therefore, there cannot be such a thing as a “wrong” PageRank. The court says: “PageRank is a creature of Google’s invention and does not constitute an independently-discoverable value. In fact, Google might choose to assign PageRanks randomly, whether as whole numbers or with many decimal places, but this would not create “incorrect” PageRanks.”

This is 100% correct, and I hope this inhibits further legal arguments that there is such a thing as a “right” or “wrong” search result. On the other hand, note that Judge Fogel’s statement doesn’t address what happens if Google were to maliciously distort a PageRank. I’ve now read 2 draft law review articles in process by authors who are all worked up about the prospect of maliciously hand-manipulated downgrading, even though that appears to be a completely hypothetical circumstance currently.

3) The judge ducked any discussion about whether 47 USC 230(c)(2) would completely insulate Google’s “filtering” decisions. Too bad; that statutory provision might have made short work of much of this lawsuit.

4) Google requested that the judge deem this lawsuit a SLAPP, which would have had the result of (1) dismissing the case entirely, and (2) requiring the plaintiff to pay Google’s legal fees. Google got to #1 anyway, but #2 would have been a huge win for Google. The judge rejected Google’s request, saying that this lawsuit did not sufficiently raise matters in the public interest because it involved a two-bit website (KinderStart’s website) that no one really knows or cares about. This is the only place I think the judge made a mistake, because it’s clear this case involved significant matters in the public interest (as the extensive media, blog and scholarly discussion about this case indicates). This lawsuit went to the very heart of the Internet’s architecture–can a content database sort and configure its content delivery based on its discretion, or is that matter sufficiently important that we should remove the content database provider’s editorial discretion in some/all cases? Stated differently, if KinderStart had won, it could have changed hundreds of millions of Google users’ daily experiences.

Therefore, I think the judge was a little disingenuous by treating this case as solely about KinderStart’s irrelevant existence. Nevertheless, I understand that the judge really didn’t want to hit KinderStart for all of Google’s legal fees, especially when the judge could give Google some fee relief through the Rule 11 sanctions.

5) The judge granted sanctions for two pleadings by Gregory Yu: the allegations that (1) Google takes payments to skew search results, and (2) Google distorts PageRank for political/religious reasons.

On the first, Yu’s background research included interviews with 2 witnesses who say Google ran pay-to-play, but Yu didn’t get written declarations from either, and each witness’ testimony had further defects–the first would have said he heard this from another person, and the second would have testified that some results appeared to be mysterious. Therefore, Yu couldn’t support the broad statement based on such inadmissible and not-credible evidence.

On the second, Yu had a number of declarations in support of the statement, but in all cases, these declarations merely stated that the witnesses believed Google engaged in such practices. Therefore, there was no solid evidence other than these third party suspicions.