Judge: Google Won't Face Group Email Privacy Lawsuit

By Joel Rosenblatt

Google (GOOG) won a major victory in its fight against claims it illegally scanned private email messages to and from Gmail accounts, defeating a bid to unify lawsuits in a single group case on behalf of hundreds of millions of Internet users.

U.S. District Judge Lucy Koh in San Jose, Calif., on Wednesday refused to let the case proceed as a class action, which would have allowed plaintiffs to pool resources and put greater pressure on Google to settle. If individuals pursue their claims against the owner of world's largest search engine, they'll need to use their own financial resources to litigate.

Email users claimed Google intercepted, read and mined the content of email messages for targeted advertising and to build user profiles. Legal experts including Stanford Law School Professor Deborah Hensler said before Wednesday's ruling that while the plaintiffs faced difficulty joining forces, the case stood to potentially become the largest group lawsuit ever. The amount at stake could have reached into the trillions of dollars if, as the plaintiffs argued, each person was eligible for damages of $100 a day for violations of federal wiretap law.

Koh's ruling has implications for email privacy cases assigned to her that were filed last year against Yahoo (YHOO) and LinkedIn (LNKD), which also have hundreds of millions of users. Similarly giant cases have been brought against Facebook (FB) and Hulu as Web users challenge how companies monetize their data for the online advertising market that generated more than $40 billion in the U.S. last year.

Koh found that the proposed classes of people in the Google case aren't "sufficiently cohesive," according to Wednesday's ruling.

Members' Consent

The judge wrote in her order that the question of whether the proposed class members consented to the alleged interceptions has been "central to this case since it was filed." %VIRTUAL-article-sponsoredlinks%Based on the evidence presented so far, to prove the arguments on each side, "consent must be litigated on an individual, rather than class-wide basis," Koh said.

Sean Rommel, a lawyer representing plaintiffs in the case, didn't respond after regular business hours Wednesday to phone and email messages seeking comment on the ruling. Google representatives didn't respond to an email seeking comment.

At a Feb. 27 hearing on whether the case would proceed as a group lawsuit, Michael Rhodes, a lawyer representing Google, argued the plaintiffs never presented a "model that they have demonstrated will actually work" to include so many plaintiffs.

"And worse, they've never shown some statistical sampling of the data set to give you more comfort that we can test to say it will not produce enough false positives," Rhodes said.

Texas, Pennsylvania

The case started with separate lawsuits by users of Gmail and other email services from states including Texas, Pennsylvania, Maryland and Florida. Those complaints were consolidated before Koh last year.

Rommel contended in a filing that the the case is "perfectly suited for class treatment" because everyone affected by the email scanning has so much in common, from the "uniform nature" of Google's extraction of data in emails to the company's "uniform disclosures" about its privacy practices.

"This is no different than, I would assert, a shareholder case where somebody is saying yes, I bought shares within the class period and here's my share," he argued to Koh at the hearing. "You have to compare it to the company records to see the date when they bought it, to see that they are actually a shareholder."

'Very Steep'

Hensler said in an interview last month that the plaintiffs' lawyers faced "a very steep hurdle," to proceed with a group case, adding that only 10 percent to 20 percent of all cases filed as class-actions are allowed to go forward.

Koh in September rejected Mountain View, Calif.-based Google's bid to dismiss the case. In a rare early victory for plaintiffs in an online privacy lawsuit, the judge rejected Google's argument that Gmail users agreed when they accepted subscription service terms and privacy policies to let their messages be scanned.

Google faces another privacy case in federal court in San Francisco brought on behalf of everyone in the U.S. whose wireless Internet connections were intercepted by company vehicles gathering information for the Street View mapping service.