• by Wendy Davis  @wendyndavis, March 9, 2010

Handing Google a procedural victory in one of the antitrust lawsuits it's currently facing, a federal judge in New York has dismissed a case brought by the search marketer TradeComet on the grounds that the company should have filed the lawsuit in California.

U.S. District Court Judge Sidney Stein ruled that TradeComet's antitrust claims "clearly arise out of and relate to Google's AdWords program," and therefore are covered by a clause in the AdWords contract requiring marketers to sue in Santa Clara County.

TradeComet alleged in court papers last year that Google raised the minimum price per click it charged TradeComet's SourceTool.com division by 10,000%, from 5-10 cents per click to $5-$10 per click. As a result, SourceTool, a business-to-business vertical search site, had to stop buying as many keywords, leading visits to plummet to the point where it received only 1% of the traffic that previously came to the site.

Stein's decision leaves TradeComet free to refile its antitrust allegations in California. The company also could appeal the dismissal to the 2nd Circuit Court of Appeals.

One of TradeComet's lawyers, Joe Bial, says the company is considering its options. "We would like to move the case forward as quickly as possible," he says. "We believe that TradeComet's antitrust claims against Google are well-supported and we fully intend to move forward with a merits case."

The ruling marks the second time in recent weeks that a judge has upheld a clause in the AdWords contract requiring that all litigation take place in Santa Clara County. In the other instance, a judge in Corpus Christi, Texas transferred a trademark infringement lawsuit brought by Flowbee (which manufactures hair-cutting systems) to Google's hometown of northern California. Google has since filed a breach of contract case against Flowbee, seeking to recover attorneys' fees and costs related to the proceedings in Texas.

Bial and his law firm, Cadwalader, Wickersham & Taft, also represent another company, myTriggers, which also is pursuing an antitrust case against Google. In that case, Google initially filed a lawsuit against myTriggers in state court in Ohio -- despite the provision in the AdWords contract requiring all disputes to be litigated in California -- for allegedly failing to pay more than $335,000 in search ad fees.

Cadwalader's Charles "Rick" Rule, listed as one of myTriggers' and TradeComet's attorneys, has represented Microsoft on some antitrust matters. But the law firm has said that Microsoft isn't connected to the current antitrust cases against Google.