Google Loses Bid for Appeals Review of Gmail Wiretap Suit

Google Inc. (GOOG) lost its bid for a federal appeals court review of a ruling that permitted a lawsuit to go forward over claims the company violated wiretap laws by scanning the contents of private e-mail messages.

U.S. District Judge Lucy H. Koh in San Jose, California, denied Google’s request for the appeal hearing in an order yesterday. While allowing federal claims in the lawsuit to proceed in a Sept. 26 ruling, Koh has yet to rule whether the plaintiffs can represent all Gmail users, as well as people whose messages were received by a Gmail user.

Lawsuits against Internet companies and social networks are multiplying as users become more aware of how much personal information they’re revealing, often without their knowledge. In San Jose, Yahoo! Inc. (YHOO) and LinkedIn Corp. (LNKD) also face accusations they’ve intercepted communications for their profit at the expense of users or non-users.

In her ruling yesterday, Koh wrote the case is a combination of various suits from different U.S. states with related claims, the oldest of which was filed more than three years ago. Koh said the plaintiffs and Google have fully argued in court filings whether the case should proceed as a group lawsuit, and that she will rule on that request “shortly” with a target trial date in October.

Tortuous History

“The long and tortuous procedural history of this litigation,” Koh wrote, “demonstrates why further delaying this three-year-old litigation for immediate appellate review is unwarranted.”

The case was brought by users of Gmail and other e-mail services from states including Texas, Pennsylvania, Maryland and Florida. They claim Google exploits the content of messages so that it can profit from the creation of user profiles and targeted advertising.

Google, the operator of the world’s largest search engine, had argued that Koh’s Sept. 26 ruling is a “novel interpretation” of wiretap laws and raised issues that had never been addressed by the U.S. Court of Appeals in San Francisco.

Google didn’t immediately respond to an e-mail after regular business hours yesterday seeking comment on the ruling.

Koh said in her September ruling that the plaintiffs can proceed with their claims that Mountain View, California-based Google violated federal wiretap laws, rejecting the company’s argument that Gmail users agreed when they accepted subscription service terms and privacy policies to let their messages be scanned. She threw out state law claims.

Novel Interpretation

Google had to ask Koh for permission to appeal her ruling as the case is still going on. The company said it must “obtain guidance on whether the court’s novel interpretation of now-antiquated statutory provisions in an unanticipated context is correct.”

Google argued in a filing that the case should be thrown out because the scanning processes at issue “are a standard and fully disclosed part of the Gmail service” and the reading and mining of e-mail is “completely automated and involves no human review.”

The case is In re Google Inc. Gmail Litigation, 13-md-02430, U.S. District Court, Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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