• by Wendy Davis  @wendyndavis, January 9, 2012

Handing Google a significant victory, a federal judge has ruled that search marketers suing the company for its “parked domains” and “errors” program may not proceed with a class-action lawsuit.

In a decision quietly issued last week, U.S. District Court Judge Edward Davila ruled that class-action status was inappropriate because “individualized issues of restitution permeate the class claims.” The decision means that marketers wishing to pursue claims must do so individually, despite potentially prohibitive costs.

The litigation dates to 2008, when a handful of marketers filed lawsuits complaining about Google's AdSense for Domains and AdSense for Errors programs. Those programs often serve ads on typo sites that people tend to visit by accident.

The marketers alleged that such sites are low-quality and that ads on them result in fewer purchases than ads on Google's search results pages. The marketers asserted that clicks on ads on parked domains "were unlikely to lead to desirable business outcomes, and that placement on such pages could damage their brands."

Google countered that marketers often benefited from ads on parked domans or error pages. The company also argued that it told marketers about the programs and allowed them to opt out.

Last year, Google unsuccessfully argued that the lawsuit should be dismissed. After losing that motion, Google opposed the marketers' request for class-action certification. Google contended that marketers' damages, if any, must be calculated on an individual basis, making the case unsuitable for class-action status.

Davila agreed with that argument. “Since the purpose of restitution is to return class members to status quo, the amount of restitution due must account for the benefits received from ads placed on parked domains and error pages,” he wrote. “Here, in many instances, individual proof would show that advertisers received significant revenues and other benefits from ads placed on parked domains and error pages -- benefits that would need to be individually accounted for in any restitution calculation.”