GOOGLE, INC. v. MyTRIGGERS. COM, INC., Ohio: Court of Common Pleas, Civil Court 2011

James A. Wilson, Esq., Kenneth J. Rubin, Esq., Vorys, Sater, Seymour and Pease, LLP, 52 East Gay Street, P.O. Box 1008, Columbus OH 43216-1008, jawilson@vorys.com, kjrubin@vorys.com, Counsel for Plaintiff, Google, Inc.

David I. Shroyer, Esq., Colley, Shroyer & Abraham, LPA, Hoster and High Building, 536 South High Street, Columbus OH 43215-5674, dshroyer@csalawfirm.com, Co-Counsel for Defendant myTriggers.com, Inc.

Stanley M. Chesley, Esq., W.B. Markovits, Esq., Waite, Schneider, Bayless & Chelsey, LPA, 1513 4th and Vine Tower, 1 West 4th Street, Cincinnati OH 45202, Co-Counsel for Defendant myTriggers.com, Inc.

Charles F. Rule, Esq., Jonathan Kanter, Esq., Joseph J. Bial, Esq., Daniel J. Howley, Esq., Cadwalader, Wickersham & Taft, LLP, 700 Sixth Street, N.W., Washington, DC 20001, Joseph.bial@cwt.com, Co-Counsel for Defendant myTriggers.com, Inc.

Bryan B. Johnson, Esq., Adams, Barner & Gitlitz, LLC, 5003 Horizons Drive, Suite 200, Columbus OH 43220, Johnson@gamblehartshorn.com, Counsel for Defendant myTriggers.com, Inc.

DECISION GRANTING PLAINTIFF AND COUNTERCLAIM DEFENDANT GOOGLE INC.'S MOTION TO DISMISS DEFENDANT MYTRIGGERS.COM. INC.'S COUNTERCLAIMS FILED ON APRIL 2, 2010

JOHN P. BESSEY, Judge.

This matter is before the Court on Plaintiff Google, Inc.'s ("Google") Civ.R. 12(B)(6) Motion to Dismiss Defendant myTriggers.com, Inc.'s ("myTriggers") Counterclaims, filed on April 2, 2010. MyTriggers filed a memorandum in opposition on April 26, 2010. Further, pursuant to an oral hearing held on June 10, 2010, Google, myTriggers, and the Ohio Attorney General filed supplemental briefs on June 14, 2010.

1. Case Background

Google is a popular search engine where users can enter a query and receive results containing information relevant to the user's search. In addition to natural results based on an algorithm, searches also return advertising results, typically the result of an auction based upon bids submitted by advertisers for keywords or combinations of keywords. Google utilizes a paid search advertising platform known as AdWords. Google also uses a quality scoring system by which Google evaluates the quality of an advertiser's site. Google creates a "Quality Score" for each advertiser's bid and uses the score to establish minimum pricing thresholds. Ultimately, ads with high quality scores are cheaper and ads with lower scores are more expensive.

MyTriggers is a "vertical search" site, which allows users to compare prices for a specific segment of online content. In an effort to create a greater amount of user traffic to its site, myTriggers began using AdWords in November of 2005 and developed keyword databases to be used on AdWords. Eventually, myTriggers line of credit with Google reached over $250,000 per month. In January, 2008, myTriggers datacenters experienced overheating incidents, causing damage to equipment and forcing myTriggers to move to a new datacenter and lay off some personnel. In March of 2008, Google raised the minimum bids for myTriggers' keyword bids.

Google brought the instant action, seeking to collect amounts owed to it by myTriggers for advertising.

II. Motion to Dismiss Standard

"A motion to dismiss for failure to state a claim upon which relief can be granted is procedural and tests the sufficiency of the complaint." Powell v. Vorys (C.A.10 1998), 131 Ohio App.3d 681, 684, quoting, State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs. (1992), 65 Ohio St. 545, 548, 605 N.E.2d 378. "In order for a trial court to grant a motion to dismiss for failure to state a claim upon which relief may be granted, `it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery.'" Powell, at 684, quoting, O'Brien v. Univ. Community Tenants Union (1975), 42 Ohio St.2d 242, 327 N.E.2d 753, syllabus. "In resolving a Civ.R. 12(B)(6) motion to dismiss, the trial court may consider only the statements and facts contained in the pleadings, and may not consider or rely on evidence outside the complaint." Powell, at 684, citing, Estate of Sherman v. Millhon (1995), 104 Ohio App.3d 614, 617, 662 N.E.2d 1098, 1100. "When a court rules on a motion to dismiss for failure to state a claim, the complaint's factual allegations must be taken as true and all reasonable inferences must be drawn in favor of the nonmoving party." Sharon Ent., Inc. v. Kenworth of Cincinnati, Inc. (1998), 131 Ohio App.3d 746, 749, citing, Vail v. Plain Dealer Publishing Co. (1995), 72 Ohio St.3d 279, 649 N.E.2d 182, Mitchell v. Lawson Milk Co. (1995), 72 Ohio St.3d 279, 649 N.E.2d 753, 756. "A motion to dismiss can be granted only where the party opposing the motion, here, the [Plaintiff], is unable to prove any set of facts which would entitle it to the relief requested." Sharon, citing, Kenty v. Transamerica Premium Ins. Co. (1995), 72 Ohio St.3d 415, 418, 650 N.E.2d 863, 865-866, York v. Ohio St. Highway Patrol (1991), 60 Ohio St.3d 143, 573 N.E.2d 1063.

III. Law and Analysis

First Counterclaim: Valentine Act (1331.01 et seq.)

MyTriggers alleges that Google violated Ohio's antitrust statute, the Valentine Act, codified in O.R.C. §§ 1331.01 et seq. Specifically, myTriggers claims Google used unlawful agreements, compacts, and other "anticompetitive restrictions" to prevent competition in the search advertising market. In its motion to dismiss, Google asserts first that the Valentine Act is preempted by 47 U.S.C. §230, or the Communications Decency Act of 1996 ("CDA"). Additionally, Google argues both that the counterclaim fails to state a claim because Google acted unilaterally and myTriggers has failed to allege either harm or an unreasonable restraint on competition.

The Valentine Act, specifically section 1331.01 (B) of the Revised Code, prohibits illegal trusts, and defines a "trust" as a combination of capital, skill, or acts by two or more persons for any of the following purposes:

(1) To create or carry out restrictions in trade or commerce;

(2) To limit or reduce the production, or increase or reduce the price of merchandise or a commodity; or

(3) To prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce or a commodity * * *

R.C. §1331.01(B). Additionally, R.C. 1331 provides that a private party may bring suit and proceed under the Valentine Act where that person is "injured in his business or property by another person by reason of anything forbidden or declared to be unlawful" by the Valentine Act. R.C. § 1331.08.

Ohio's Valentine Act was "patterned after the Sherman Antitrust Act" and the Ohio Supreme Court has stated that "as a consequence, this court has interpreted the statutory language in light of federal judicial construction" of federal antitrust statutes. Johnson v. Microsoft Corp, 106 Ohio St.3d 278, 282, 2005-Ohio-4985, quoting C.K. & J.K., Inc. v. Fairview Shopping Ctr. Corp. (1980), 63 Ohio St.2d 201, 204, 407 N.E.2d 507. Moreover, "federal policy and federal cases interpreting the Sherman Act must be examined to ascertain the meaning of the Valentine Act * * *." Schweizer v. Riverside Methodist Hosp. (10th Dist. 1996), 108 Ohio App.3d 539, 542, citing List v. Burley Tobacco Growers' Co-op. Ass'n (1926), 114 Ohio St. 361, 151 N.E. 471. (Emphasis added).

"The criteria to be resorted to in any given case for the purpose of ascertaining whether violations of the Sherman Antitrust Act and the Valentine Act * * * have been committed is the rule of reason guided by the established law * * *." Schweizer, 108 Ohio App.3d at 542, quoting Standard Oil Co. v. United States (1911), 221 U.S. 1, 62. See also List, 114 Ohio St. at paragraph four of the syllabus. Federal courts have stated that to prevail on a rule of reason analysis a plaintiff must prove the following: "(1) that the defendant(s) contracted, combined, or conspired; (2) that such contract produced adverse anticompetitive effects; (3) within the relevant product and geographic markets; (4) that the objects of and conduct resulting from the contract were illegal; and (5) that the contract was a proximate cause of plaintiffs [antitrust] injury." Island Express Boat Lines, Ltd. v. Put-In-Bay Boat Line Co., 6th Dist. No. E-06-002, 2007-Ohio-1041 at paragraph 74, quoting Care Heating & Cooling, Inc. v. American Standard, Inc. (6th Cir. 2005), 427 F.3d 1008, 1014.

A. Preemption under 47 U.S.C. § 230

Generally, preemption of state law is disfavored "in the absence of persuasive reasons either that the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained." Florida Lime & Avocado Growers, Inc. v. Paul (1963), 373 U.S. 132, 142. Consistent with that general presumption, the CDA expressly provides that "[n]othing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section." 47 U.S.C. § 230(e)(3). The CDA was primarily enacted in order to control the exposure of minors to indecent material while maintaining a competitive e-commerce market. Batzel v. Smith, (9th Cir. 2003), 333 F.3d 1018, 1026. In addition, the statute's passage was prompted by the legislature's desire to encourage the development of "filtering technologies that empower parents to restrict their children's access to objectionable or inappropriate online material." National Numismatic Certification, LLC v. eBay, Inc. (M.D. Fl. 2008), Case No. 6:08-cv-42-Orl-19GJK, 2008 U.S. Dist. LEXIS 109793 at 81, quoting 47 U.S.C. § 230(b)(4).

The CDA offers two forms of protection to "interactive computer services" such as Google. First, under § 230(c)(1), the "interactive computer service" is deemed not to be the publisher or speaker of information provided by another party. Secondly, the CDA provides immunity to any "interactive computer service" which restricts access to content that is "obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable." 47 U.S.C. § 230(c)(2). Google argues that the phrase "otherwise objectionable" contained within § 230(c)(2) must be read to include any type of editorial discretion Google uses when selecting which ads to include in its search results.

When a general term follows specific terms, courts presume that the general term is limited by the preceding terms. Begay v. United States (2008), 553 U.S. 137, 128 S.Ct. 1581, 1584. See also Hall Street Assocs., L.L.C. v. Mattell, Inc. (2008), 552 U.S. 576, 586, 128 S. Ct. 1396 (stating that under the canon of ejusdem generis, "when a statute sets out a series of specific items ending with a general term, that general term is confined to covering subjects comparable to the specifics it follows"). Similarly, under § 230(c)(2), "objectionable content must, at a minimum, involve or be similar to pornography, graphic violence, obscenity, or harassment." National Numismatic, 2008 U.S. Dist. LEXIS 109793 at 82, (noting that Congress provided guidance on the term "objectionable" by including the list of examples in the statute).

In part, Google relies on Landon v. Google, (D. Del. 2007), 474 F. Supp.2d 622, to support its argument that the phrase "otherwise objectionable" is broad enough to immunize Google's decisions whether or not to publish specific ads. In Landon, the court found § 230(c)(2) immunity barred a claim against Google when Google decided not to include two particular ads in its search results; one alleging fraud against government officials and a second ad alleging various atrocities of the Chinese government. When discussing the Landon decision, the court in National Numismatic, supra, explained that "[a]lthough the [Landon] opinion contains some broad language concerning `immunity for * * * editorial decisions' and did not consider the canon of ejusdem generis, or the public policy behind section 230, the holding is entirely consistent with respect to this Court's reasoning to the extent that advocating `against a group' is similar to `harassment'." The court in National Numismatic, therefore, expressed the view that the ads in Landon did not fall within the more general phrase "otherwise objectionable", but were consistent with one of the more specific examples preceding "otherwise objectionable."

Google further argues that courts have interpreted "otherwise objectionable" broadly, and cites a number of additional cases in support of that claim. The cases cited by Google for its proposition that the phrase "otherwise objectionable" is broadly construed do not stretch the meaning of that phrase as far as Google argues. Two of these cases include computer service providers blocking mass delivery of unsolicited commercial emails from reaching subscribers' email accounts. See e360 Insight, LLC v. Comcast Corp. (N.D. Ill. 2008), 546 F. Supp.2d 605 and Am. Online v. Greatdeals.net (S.D. W.Va. 1999), 49 F. Supp.2d 851. In each of these cases, the type of conduct at issue is much more similar to the specific adjectives included in § 230(c)(2), namely "harassment". Google also cites cases where the courts analyzed immunity under § 230(c)(1), with the courts finding that the computer services involved were not liable as publishers or speakers of information provided by third-parties, which is not an issue here. See Green v. Am. Online (3rd Cir. 2003), 318 F.3d 465 Ben Ezra, Weinstein & Co. v. Am. Online (10 Cir. 2000), 206 F.3d 980.

Here, the ads at issue in myTriggers counterclaim do not fall within the same class of objectionable content that is listed in § 230(c)(2). The examples preceding the phrase "otherwise objectionable" clearly demonstrate the policy behind the enactment of the statute and provide guidance as to what Congress intended to be "objectionable" content. Therefore, since the Court finds that no conflict exists between the CDA and the Valentine Act the Court finds that the instant action is not preempted under 47 U.S.C. 230.

B. Alleged Harm to Competition

Google, in its motion to dismiss, argues that myTriggers has failed to adequately plead an antitrust injury sufficient to withstand dismissal at the pleadings stage. MyTriggers responds that any alleged harm is a factual dispute that cannot be resolved by Google's motion to dismiss.

"[A]ntitrust standing `is the glue that cements each suit with the purposes of the antitrust laws, and prevents abuses of those laws' by claimants seeking to halt the strategic behavior of rivals that increases, rather than reduces, competition." NicSand, Inc. v. 3M Co. (6th Cir. 2007), 507 F.3d 442, 449-50, quoting HyPoint Tech., Inc. v. Hewlett-Packard Co. (6th Cir. 1991), 949 F.2d 874, 877. Further, "antitrust standing is a threshold, pleading-stage inquiry and when a complaint by its terms fails to establish this requirement we must dismiss it as a matter of law— lest the antitrust laws become a treble-damages sword rather than the shield against competition-destroying conduct that Congress meant them to be." NicSand, 507 F.3d at 450.

As noted above, in order to succeed on an antitrust claim, the plaintiff must prove anti-competitive effects of the defendant's illegal conduct. "[A] `naked assertion' of antitrust injury, the [U.S.] Supreme Court has made clear, is not enough; an antitrust claimant must put forth `allegations plausibly suggesting (not merely consistent with)' antitrust injury." Id. at 451, quoting Bell Atl. Corp. v. Twombly (2007), 550 U.S. 544, 557. "Without a showing of actual adverse effect on competition, [a claimant] cannot make a case under the antitrust laws." Schweizer, 108 Ohio App.3d at 544, citing Jefferson Parish Hosp. Dist. No. 2 v. Hyde (1984), 466 U.S. 2. "This heightened standing requirement reflects the principle that antitrust laws exist to protect competition, not individual competitors." Wagner v. Circle W. Mastiffs (S.D. Ohio 2010), 732 F. Supp.2d 792, 801, citing Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. (1977), 429 U.S. 477. See also CBC Cos. v. Equifax, Inc. (6th Cir. 2009), 561 F. 3d 569, 572 (holding that "[T]o prove antitrust injury, the key inquiry is whether competition—not necessarily a competitor—suffered as a result of the challenged business practice.").

Here, the counterclaim only alleges harm to myTriggers itself In addition, myTriggers' counterclaims contain allegations that other competitive vertical search sites were indeed favored by Google. In paragraph 12 of its counterclaim, myTriggers alleges that "Google has entered these favorable agreements with Shopping.com, shopzilla.com, PriceGrabber.com, bizrate.com, NexTag.com * * *." Such an allegation undercuts myTriggers' argument that competition as a whole within the relevant market is being injured. While myTriggers identifies those favored by agreements with Google, myTriggers allegations do not contain any specific competitor other than myTriggers that has been harmed by Google's alleged conduct.

Further, myTriggers' allegation that the compacts and conduct of Google and its "search partners" constituted a "blacklist" also fails to establish a claim. As with alleging an antitrust injury, vague claims of a company boycott are also insufficient. "Generic pleading, alleging misconduct against defendants without specifics as to the role each played in the alleged conspiracy, was specifically rejected by Twombly.'" Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield (6th Cir. 2008), 552 F.3d 430, 436, 2008 U.S. App. LEXIS 25810. In Total Benefits, the court dismissed an antitrust claim absent allegations plausibly suggesting or specifically identifying agreements whereby the defendant companies agreed with each other to boycott the plaintiff company.

Consistent with the above discussion, the Court finds that myTriggers' allegations do not meet the necessary standard for pleading an antitrust injury.

C. Unilateral Conduct

Google next argues that the Valentine Act does not apply to any unilateral actions taken by Google. In response, myTriggers contends that the Valentine Act applies to unilateral conduct. As discussed above, the Court finds that myTriggers has failed to sufficiently plead any antitrust injury to support this counterclaim. Therefore, it is unnecessary for the Court to determine if unilateral conduct is actionable under the Valentine Act.

Based on the above discussion, the Court hereby GRANTS Google's motion to dismiss with respect to myTriggers' counterclaim that Google violated the Valentine Act.

Second Counterclaim: Breach of Contract

In its second counterclaim, myTriggers alleges that Google breached a purported contract between the two parties. In its motion to dismiss, Google asserts that myTriggers' failure to identify any contract or any specific terms of an agreement requires that the counterclaim be dismissed.

To succeed on a breach of contract claim, the plaintiff must show each of the following elements: (1) the existence of a contract, (2) performance by the plaintiff, (3) breach by the defendant, and (4) damage or loss to the plaintiff resulting from the defendant's breach. Doner v. Snapp (1994), 98 Ohio App.3d 597, 600.

Here, myTriggers has failed to adequately allege Google breached any contract between the two parties. Although myTriggers generally alleges a breach, the counterclaims neither attach nor identify a specific contract that was breached as required by Civ.R. 10(D). Further, the counterclaim does not establish through factual allegations a particular provision or any particular language that Google has allegedly breached. In addition, the counterclaim's language demonstrates that myTriggers itself is unaware of the existence of a specific contract, stating that "Google breached the terms of the written and/or oral and/or implied contract(s), if any, between the parties." (Emphasis added). Lastly, myTriggers has failed to allege that it performed its obligations under the alleged contract.

Therefore, based on the above discussion, the Court hereby GRANTS Google's motion with respect to this claim.

Third Counterclaim: Estoppel

MyTriggers alleges that Google, through its purported dealings with myTriggers, induced myTriggers to rely on those dealings to its detriment. Google argues in its motion to dismiss that myTriggers again fails to specifically articulate any facts supporting this counterclaim, or even specify which type of estoppel myTriggers is alleging in its counterclaim.

Equitable estoppel is a defense to a legal or equitable claim, while promissory estoppel is a cause of action. Ford Motor Credit Co. v. Ryan, 189 Ohio App.3d 560, 599, 2010-Ohio-4601, citing Stern v. Shainker, 8th Dist. No. 92301, 2009-Ohio-2731; Callander v. Callander, 10th Dist. No. 07AP-746, 2008-Ohio-2305. "The key distinction between the two doctrines is that equitable estoppel arises from a misrepresentation of fact, while promissory estoppel arises from a promise." Hortman v. Miamiburg, 110 Ohio St.3d 194, 199, 2006-Ohio-4251. "Promissory estoppel is a sword, and equitable estoppel is a shield." Callander, 2008-Ohio-2305 at P31, quoting Holt Co. of Ohio v. Ohio Machinery Co., 10th Dist. No. 06AP-911, 2007-Ohio-5557. Because promissory estoppel, not equitable estoppel, is properly used to create a cause of action, the Court construes myTriggers' "estoppel" counterclaim as a claim for promissory estoppel.

The "elements of a cause of action for promissory estoppel are: (1) a clear, unambiguous promise; (2) reasonable and foreseeable reliance upon the promise by the person to whom the promise is made; and (3) resulting injury to the party who relied on the promise" Ohio Envtl. Dev. L.P. v. Ohio EPA, 10th Dist. No. 09AP-683, 2010-Ohio-414 at P17, citing Raabe v. Ohio Bd. of Speech-Language Pathology & Audiology, 10th Dist. No. 04AP-954, 2005-Ohio-2335, P28. Further, "[a] promise, for promissory estoppel purposes, must involve commitment, or manifestation of an intention to act or refrain from acting in a specified way." Lopardo v. Lehman Bros., Inc., 548 F. Supp.2d 450, 468, 2008 U.S. Dist. LEXIS 17377, citing Andersons, Inc. v. Consol, Inc., 185 F. Supp.2d 833.

In its counterclaim, myTriggers fails to articulate any "unambiguous" promise made by Google or any factual representation made by Google on which myTriggers relied. Further, myTriggers has not shown any reliance to its detriment on the alleged promises/representations of Google. In its counterclaim, myTriggers only identifies a couple of statements made to it by Google representatives. The first statement is a partial quote that states myTriggers would be "a great result to show" for users doing comparison shopping. (Paragraph 28). Secondly, myTriggers alleges that during a conference call to discuss price increases, Google representatives "suggested improvements in general terms but did not provide any specific advice on how to improve the sites' `quality score.'" (Paragraph 32). The Court does not find that these statements amount to promises on which myTriggers could have reasonably relied.

Therefore, the Court hereby GRANTS Google's motion with respect to this counterclaim.

Fourth Counterclaim: Rescission

In its fourth counterclaim, myTriggers asserts that a "mistaken understanding" of material and essential terms within the purported contract between it and Google requires rescission of the alleged contract between the parties. Google, in response, argues that because myTriggers has failed to even sufficiently allege the existence of a contract, a claim of rescission cannot stand. In addition, Google asserts that myTriggers' counterclaim has not been pled with sufficient particularity, as required by Civ. R. 9(B), and should be dismissed.

For a contract to be rescinded based on fraud, the claimant must demonstrate the following: (1) that there were actual or implied representations or material matters of fact, (2) that such representations were false, (3) that such representations were made by one party to the other with knowledge of their falsity, (4) that they were made with the intent to mislead the other party to rely thereon, and (5) that such party reasonably relied on the representations. Schulz v. Sullivan (1st Dist. 1993), 92 Ohio App.3d 205, 209, 634 N.E.2d 680.

In addition to the necessary common-law elements of fraud, Civ.R. 9(B) of the Ohio Rules of Civil Procedure requires that a claim for fraud or mistake must be pled with particularity. In Korodi v. Minot 10th Dist. 1987), 40 Ohio App. 3d 1, 531 N.E.2d 318, the Franklin County Court of Appeals discussed the requirements of Civ.R. 9(B) for purposes of a 12(B)(6) Motion to Dismiss, when it stated:

In assessing the adequacy of a complaint sounding in fraud for purposes of Civ.R. 12(B)(6), the "particularity" condition of Civ.R. 9(B) may be satisfied by meeting the following requirements: (1) plaintiff must specify the statements claimed to be false; (2) the complaint must state the time and place where the statements were made; and (3) plaintiff must identify the defendant(s) claimed to have made the statement(s). Although these requirements are intended to place potential defendants on notice of the precise statements alleged to be fraudulent, the importance of notice must be tempered by the provisions of Civ.R. 8(A)(1) and (E).

N.E. 774.

As discussed earlier, the counterclaims do not articulate any representations or statements made by Google that would satisfy the above standard. The counterclaim refers only vaguely to representations made by Google representatives (see paragraphs 28 and 32 of counterclaims). Further, and consistent with the breach of contract counterclaim above, myTriggers has failed to adequately identify any specific contract, or even any provision/term of an alleged contract, to be rescinded. Therefore, the Court finds that myTriggers has not sufficiently stated a claim for rescission.

The Court hereby GRANTS Google's motion with respect to this counterclaim.

IV. Conclusion

Based on the above discussions and analysis, the Court hereby GRANTS Google's Motion to Dismiss myTriggers Counterclaim in its entirety. Furthermore, counsel for Google shall submit the appropriate Judgment Entry pursuant to Loc.Rs. 25.01 and 25.02.

It Is So Ordered.

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