KinderStart is a website business relating to children which saw its traffic plummet when its homepage was reset to a Google PageRank of zero. PageRank is a Google system for judging the importance of a web page on a scale of zero to 10. It influences where that page appears in search results.
KinderStart claimed defamation and anticompetitive business practices resulting from the ranking demotion, and also claimed that several other sites had had the same experience.
"KinderStart claims that Google has interfered with KinderStart’s First Amendment rights [to free speech]", and “has engaged in predatory conduct and anticompetitive conduct directed toward achieving the objective of controlling prices and/or destroying competition", said court papers.
Judge Jeremy Fogel of the US District Court for the Northern District of California threw the case out, saying that KinderStart had been given a second chance to make its case and had still failed.
"The Court concluded in its July 13th Order that KinderStart had failed to allege facts sufficient to support each of the four elements of an attempted monopolization claim," said the judge. "The Court also noted that KinderStart had not sufficiently described the markets relevant to its claim. The SAC [second amended complaint] suffers from essentially the same defects."
The court rejected the claims of defamation on almost exactly the same grounds on which it had rejected the claim before. "The Court dismissed the defamation and libel claim in the FAC [first amended complaint] on the basis that KinderStart had failed to explain how Google caused injury to it by a provably false statement about the output of Google’s algorithm regarding KinderStart.com, as distinguished from an unfavorable opinion about KinderStart.com’s importance," said Fogel. "[KinderStart's] allegations are vague and ambiguous, and KinderStart makes only general claims as to the type of injury it allegedly suffered … KinderStart still has failed to identify a provably false statement."
Fogel not only threw out the case but also refused KinderStart the opportunity to appeal, because it said the company and its lawyers had failed to make full use of the second chance it had already had.
"Having concluded that it should grant the motion to dismiss, the Court must consider whether to grant leave to amend the complaint," said Fogel. "In its July 13th Order, the Court gave KinderStart explicit, detailed direction that KinderStart largely failed to follow in the second amended complaint."
"Instead, KinderStart reasserted the same deficient allegations identified in the July 13th Order. The instant case has been intensively litigated for more than eleven months. Under these circumstances, the Court concludes that there is no reasonable likelihood that KinderStart will cure the defects in the second amended complaint by further amendment. Accordingly, the motion to dismiss will be granted without leave to amend," he said.
Fogel went even further in a second, related order.
KinderStart lawyer Gregory Yu of law firm Global Law Group was reprimanded by the judge for his unsupported claims that other companies had suffered unfair treatment at the hands of Google. "The Court concludes that the allegation that Google sells priority placement in its results should not have been made based upon the limited information identified by Yu," said Fogel. "As presented to the Court on this motion, Yu’s purported evidence is either double hearsay or hearsay speculation as to the 'mysterious' causes of improvement in a website’s position in Google’s search results. The Court concludes that the allegations are sanctionable under Rule 11 because they are factually baseless and because Yu failed to perform an adequate investigation before filing them."
"It is true that Yu spoke with a number of people who believe that Google engages in religious or political discrimination, but a reasonable, competent investigation requires more than suspicions or belief. Yu had a professional responsibility to refrain from filing such allegations if he did not have appropriate supporting evidence," said Fogel.
Fogel said that he would take action against Yu. "Yu should have removed the allegations of sold search rankings and discrimination from the second amended complaint, and Google is entitled to reasonable compensation for having to defend against these claims," he said.