Siding against Yahoo, a judge rejected the company's request that a small business post a bond before proceeding with its false advertising case.
Yahoo had asked for an order requiring Wilson & Haubert, a law firm based in North Little Rock, Ark., to post $22,000 in order to move forward with its allegations that Yahoo's Localworks program didn't deliver the results it promised. Yahoo argued that it was entitled to the bond, on the theory that it was likely to win the lawsuit, and also recover court costs from the law firm.
But U.S. District Court Judge Edward Chen in the Northern District of California rejected that request this month.
Wilson & Haubert alleged in a complaint filed last year that it paid $90 for a three-month subscription to Localworks -- a service aimed at boosting small
businesses by ensuring they are listed in online directories and improving their visibility in search results, directories and map applications.
The law firm said in its complaint that it found more than 87 errors in the its directory listings after signing up for the service.
Yahoo responded in court papers that any mistakes in the listings resulted from an error that the law firm made during the sign-up process. “A five-minute call to Yahoo’s customer service could have resolved the problem,” the company argued. “The Localworks service works as advertised and would have done so originally but for [the] error.”
The law firm countered in court papers that it signed up correctly.
Chen ruled that Yahoo had only shown a “possibility” that it would win the lawsuit -- which isn't enough to require a bond. “Yahoo has introduced exhibits and declarations calling into question the merits of Plaintiff’s claims. Plaintiff has responded with exhibits and declarations purporting to refute Yahoo’s contentions,” Chen wrote. “Yahoo has not shown a possibility of success on the merits which warrant the posting of a bond.”