• by Wendy Davis , Staff Writer @wendyndavis, May 20, 2014

A federal appellate court has turned away consumers who say their privacy is violated by Gmail ads.

The 9th Circuit Court of Appeals rejected the consumers' attempt to immediately appeal U.S. District Court Judge Lucy Koh's recent decision denying them class-action status in the case. Koh's ruling theoretically still allows the consumers to move forward as individuals. But as a practical matter, the decision could make it prohibitively expensive for the consumers to go ahead with the lawsuit. The appellate court didn't give any reason for its decision, which was quietly issued last week.

The ruling marks the latest chapter in a longstanding battle about Google's practice of scanning Gmail messages in order to surround them with targeted ads. The consumers argue that the scans violate the federal wiretap law, which prohibits companies from intercepting electronic communications without at least one party's consent.

Google has said that Gmail account holders consent by accepting the company's terms of service, and that non-account holders implicitly consent by using the service.

Koh surprised many observers last year, when she agreed with the consumers that the scans potentially violated the wiretap law. Specifically, she disagreed with Google that its written policies clearly disclosed its practices.

But even though consumers won that round, they lost a key battle in March, when Koh ruled that they can't proceed as a class-action. She said that one of the main contested issues will be whether people consented to the email scans, but figuring out the answer to those questions will require case-by-case analysis.

Meanwhile, Google revised its privacy policy last month. The company now tells users: “Our automated systems analyze your content (including emails) to provide you personally relevant product features, such as customized search results, tailored advertising, and spam and malware detection. This analysis occurs as the content is sent, received, and when it is stored.”