• by Wendy Davis  @wendyndavis, August 14, 2012

A federal appellate court has agreed to decide whether marketers suing Google for click fraud can proceed with a class-action lawsuit against the search company.

The 9th Circuit Court of Appeals didn't give a reason for accepting the case, but the move is consistent with the court's decision last month in a case involving Facebook. In that matter, the court agreed to consider whether pay-per-click marketers suing the social networking service may proceed with a class-action lawsuit.

The litigation against Google stems from its "parked domains" and "errors" programs, which often serve ads on typo sites that people visit accidentally.

Several pay-per-click marketers -- including container company JIT Packaging, law firm Pulaski & Middleman and retailer RK West -- alleged in potential class-action lawsuits that ads on Google's AdSense for Domains and AdSense for Errors programs result in fewer purchases than ads on Google's search results pages. The marketers also claimed that ads on parked domains "could damage their brands."

Earlier this year, U.S. District Court Judge Edward Davila in the Northern District of California rejected the marketers' motion for class-action status. Davila ruled that a class-action would be inappropriate because "individualized issues of restitution permeate the class claims."

Davila's decision allowed the marketers to continue with the case as individuals, but it's unlikely that any potential damage awards would cover the cost of litigation. By contrast, in class-action lawsuits, attorneys often are awarded fees as part of the final judgment.

Shortly after Davila ruled against class-action status, the marketers unsuccessfully asked him to reconsider. They argued that restitution awards could be calculated without individualized inquiries. Alternatively, they asked Davila to certify a class simply for purposes of figuring out whether Google was liable.

Davila rejected both of those arguments, noting that the class-certification question has "already been thoughtfully decided."

The marketers then asked the 9th Circuit Court of Appeals to decide the issue. That court agreed to do so last week.

In the Facebook matter, the marketers Fox Test Prep and Steven Price (who operates the car site DriveDownPrices.com) are seeking to overturn U.S. District Court Judge Phyllis Hamilton's decision rejecting their motion for class-action status. Hamilton, a judge in the Northern District of California, ruled in April that the marketers hadn't shown that "common questions predominate" -- a necessary condition for class-actions.

Price and Fox Text allege that Facebook charged them for invalid clicks. Two years ago, U.S. District Court Judge Jeremy Fogel in San Jose, Calif., ruled that Facebook's contract with marketers disclaimed liability for clicks that were "fraudulent" in the sense that the clicker had dubious intentions. But Fogel said that Facebook's disclaimer didn't apply to clicks that were "invalid" -- such as when technical problems kept users from reaching landing pages.

In her ruling denying class-certification, Hamilton said that the marketers hadn't shown a "uniform method" for distinguishing 'invalid' clicks from 'fraudulent' ones.