Best Carpet Values, Inc. v. Google LLC

Background

Best Carpet Values, Inc. and Thomas D. Rutledge brought a proposed class action against Google LLC. Best Carpet Values owns bestcarpetvalue.com, and Rutledge owns thomasrutledgelaw.com. The plaintiffs alleged that, from March 2018 through April 2020, Google’s Android Search App superimposed a Google “VIEW 15 RELATED PAGES” advertisement over website homepages after Android users reached those websites through search results. They alleged that expanded advertisements covered much of the websites’ visible content and included links to competitors and other websites.

The plaintiffs asserted claims for implied-in-law contract and unjust enrichment, trespass to chattels, and violations of California’s Unfair Competition Law under its unlawful and unfair practices provisions. Google moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legal claim.

Trespass to Chattels

The court denied dismissal of the trespass claim. It held that a website can qualify as intangible personal property subject to a trespass-to-chattels claim under the reasoning of Kremen v. Cohen and related cases. The plaintiffs alleged that Google’s ads obscured and blocked website content, impaired the websites’ published output, and reduced their functionality, value, and utility. The court concluded that these allegations plausibly showed the required injury at the pleading stage, even though the plaintiffs did not allege that their files or data were physically altered or that their servers were disrupted.

Implied Contract and Unjust Enrichment

The court also denied dismissal of the implied-contract and unjust-enrichment claim. Google argued that the claim was preempted by section 301 of the Copyright Act because it concerned how copies of the plaintiffs’ websites were displayed. The court rejected that argument. It found that the plaintiffs were not challenging Google’s copying or display of their websites; they alleged instead that Google covered portions of the websites with unpaid advertisements for Google’s financial benefit. Because that theory included an additional element beyond reproduction, performance, distribution, or display of copyrighted works, the court found the claim qualitatively different from a copyright-infringement claim and not preempted.

California Unfair Competition Law

The court denied dismissal of the unlawful-practices portion of the California Unfair Competition Law claim. The plaintiffs alleged that Google’s conduct was unlawful because it constituted trespass to chattels and violated the implied-contract and unjust-enrichment theories. Those claims could serve as the required underlying violations.

The court granted dismissal of the unfair-practices portion. It applied the standard used for claims between competitors, which asks whether conduct threatens or harms competition, rather than the consumer-focused standard that balances consumer harm against the usefulness of the challenged practice. The court concluded that the plaintiffs were not consumers of the Google Search App for purposes of this case and noted that they effectively conceded they could not satisfy the competition-based standard. The court dismissed this portion without leave to amend.

First Amendment Defense

Google argued that the First Amendment protected its control over information displayed to users. The court rejected that defense for purposes of the motion to dismiss. The plaintiffs were challenging advertisements placed over their websites after users had selected links to those websites, not Google’s arrangement of search results. The court also noted that the First Amendment does not provide an absolute defense to allegations involving deceptive commercial speech. The court therefore denied dismissal on this ground.

Disposition

Judge Edward J. Davila ordered that Google’s motion to dismiss was granted as to the Unfair Competition Law claim under the unfair-practices prong and denied in all other respects. The unfair-practices portion was dismissed without leave to amend. The opinion did not dismiss the other challenged claims or the unlawful-practices portion of the Unfair Competition Law claim.