• by Wendy Davis  @wendyndavis, March 11, 2013

Twitter has lost a preliminary battle in a lawsuit by PeopleBrowsr, which alleged that the microblogging service intended to improperly cut off access to its real-time stream of tweets.

U.S. District Court Judge Edward Chen in the Northern District of California ruled that Twitter improperly attempted to transfer PeopleBrowsr's lawsuit from state to federal court. Chen not only sent the lawsuit back to state court -- where a judge previously issued a restraining order against Twitter -- but also ordered Twitter to reimburse PeopleBrowsr for its legal fees.

Twitter "lacked an objectively reasonable basis" to attempt to transfer the matter to federal court, Chen ruled last week. The judge added that the timing of Twitter's request -- soon after a state judge issued a restraining order against the company -- "suggests that Twitter's decision to remove this case was born out of a desire to find a more sympathetic forum."

PeopleBrowsr, which operates the real-time analytics service Kred, sued Twitter last November, shortly before the microblogging site was slated to turn off PeopleBrowsr's access to the firehose -- or real-time stream of tweets. PeopleBrowsr CEO John David Rich argued that the upcoming move would cripple its business, which he said used firehose data to "provide deep analytics based on a comprehensive picture of Twitter activity."

Rich said in court papers that the company's "real-time scoring engine" analyzes 3,000 to 4,000 tweets every second. PeopleBrowsr then "extracts useful information from the tweets, such as users’ location, gender, and communities; processes and tags the tweets for use in PeopleBrowsr’s analytics; and stores the tweets in its 100+ Terabyte data mine," it alleged.

Rich added that PeopleBrowsr needed the firehose data in order to meet contractual obligations with other companies, including defense contractor Strategic Technology Research, Cadalys, Radian6, Badgeville, Mashable and DynamicLogic.

PeopleBrowsr -- which said it paid Twitter $1 million a year for access to the data -- argued it would no longer be able to provide services to its own clients without the firehose data. PeopleBrowsr accused Twitter of claims grounded in California state law, including wrongly interfering with contractual relations and violating a state business statute.

Shortly after PeopleBrowsr filed suit, a state court judge issued a temporary restraining order banning Twitter from terminating PeopleBrowsr's access to data.

Twitter then transferred the case to federal court, on the theory that all of PeopleBrowsr's claims involved federal antitrust law. But PeopleBrowsr challenged that transfer, arguing that its claims didn't implicate federal laws.

Chen agreed with PeopleBrowsr, ruling that "remand is appropriate," and that it was entitled to recover reasonable fees and costs incurred in fighting the transfer request. "There do not appear to be any unusual circumstances militating against an award of fees and costs," Chen wrote.