Old cases dealing with quarantines and sewage say states have standing under authority to protect citizens.
A suit brought by state attorneys general accusing Google of overseeing a broad scheme of anticompetitive conduct in digital display advertising markets will continue following a Jan. 28, 2025, ruling from the Eastern District of Texas (Texas v. Google, 4:20-CV-957-SDJ, E.D. Texas, Sherman Div.).
The ruling comes more than four years after the State of Texas, along with 15 others and Puerto Rico, filed a complaint alleging Google acts as a “middleman” for vast volumes of electronic exchanges, allowing it to charge higher prices on platforms where online display ads are bought and sold.
Google moved for dismissal under Federal Rule 12(b)(1), arguing the states lacked standing. But the attorneys general countered that they have standing in both their sovereign capacity, and their parens patriae capacity as protectors of their citizens, to seek remedies for Google’s anticompetitive and deceptive conduct. The judge agreed with the states that they have parens patriae standing. The court said that while states do not typically invoke federal jurisdiction, they are permitted to do so in certain circumstances if the requirements of Article III of the U.S. Constitution are met.
Longstanding Precedent Cited
Ultimately, the court ruled that a series of Supreme Court and lower court decisions dating back more than a century inform courts on requirements for states to establish parens patriae standing based on injuries to the economic well-being of their residents. The court cited a 125-year-old case, for example, Louisiana v. Texas, 176 U.S. 1 (1900), dealing with a challenge of a quarantine ordered by Texas officials limiting trade between the state and the port of New Orleans.
“Observing that Louisiana had no authority to protect the freedom of interstate commerce, and that its cause of action did not involve the ‘infringement’ of the state’s sovereign powers or any ‘special injury to her property,’ [Louisiana v. Texas] concluded that Louisiana had properly stated an interest as parens patriae in protecting ‘her citizens at large’ from economic harm due to Texas’s quarantine regulations,” the Texas court wrote.
It also cited cases that permitted states to combat public nuisances in federal court, including Missouri v. Illinois, 200 U.S. 496 (1906), which addressed the discharge of sewage into the Mississippi River in Missouri. History shows that “parens patriae interests extend well beyond the prevention of … traditional public nuisances,” the court wrote, citing Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592 (1982). In that case, Puerto Rico sued the apple industry for discrimination of Puerto Rican farm workers, by requiring them to work in extra burdensome working conditions and improperly terminating them. An appellate court held that Puerto Rico had standing.
The judge in Texas v. Google noted the shift in legal antitrust movements from the physical, citing railroads and oil companies as past violators, to a new landscape in the virtual world.
Another pending advertising antitrust case against Google was filed by the U.S. and eight states in the Eastern District of Virginia in January 2023 (U.S. v. Google, No. 1:23-cv-00108, E.D. Va., Alexandria Div.). See the complaint. A bench trial was held in November 2024, and the parties are working on redacting the transcript of the proceeding.
Chipping Away at Google
Google has not fared well in government cases accusing it of maintaining monopolies in search and search advertising markets, drawing a ruling from federal court in the District of Columbia in August 2024 that it unlawfully maintained monopolies in the general search services and search text advertising markets in violation of Section II of the Sherman Act. That ruling was handed down in two combined cases: One filed by the U.S. and 11 States in October 2020 (see our previous story about U.S. v. Google, No. 1:20-cv-03010, D.D.C. [APM]) and another filed by 38 state attorneys general in December 2020 (see our previous story about Colorado v. Google, No. 20-cv-3715 , D.D.C. [APM]).
In October, at the direction of the judge, the Department of Justice released a list of remedies designed to alleviate the Sherman Act violations he found, i.e., those stemming from Google’s revenue sharing agreements, contracts allowed that allowed for the exclusive preinstallation of its search engine on Safari and Firefox web browsers and Chrome and Android devices.
Apple Has Concerns
Meanwhile, as a key partner to Google in these agreements, Apple Inc. moved to intervene in the case because it believes its interests are no longer adequately protected. Specifically, Apple claims that it will suffer clear and substantial irreparable harm if unable to participate in the remedies phase, i.e., it would be left without the ability to defend its right to contract with Google.
However, the court held on Feb. 2 that Apple did not satisfy the stringent requirements for a stay pending appeal. The company did not show a likelihood of success on the merits or that it would otherwise suffer irreparable harm, the court held. Further, the court said the company failed to contend that the court applied the wrong legal standard or that it clearly erred in its findings, nor did it demonstrate that it would suffer irreparable harm without a stay. Apple has been allowed to participate as amicus curiae and plans to expedite its appeal, the court noted. Finally, granting a stay would harm the existing parties and the public interest by perpetuating unlawful activity, the court held, reiterating its conclusion that that Google violated federal antitrust law.
