Antitrust Law Daily Wrap Up, ANTITRUST—S.D. Fla.: Antitrust claims against Google over telephone number searching fail to connect, (Nov 12, 2024)

By Kenneth H. Ryesky, M.B.A., J.D.

The plaintiff company alleged that Google’s monopoly on general search services harmed its reverse phone number business.

The federal district court in West Palm Beach has partially dismissed the claims asserted against Google by a web developer company that offers reverse telephone look-up services. The federal Sherman Act and patent infringement claims were dismissed from the putative class action lawsuit. The complaint alleged three Sherman Act claims, a monopoly claim lacked antitrust standing, a restraint of trade claim failed to properly plead an agreement or a connection with an alleged agreement to the case, and a refusal to deal claim failed for multiple deficiencies of pleading. The court ruling on dismissal of the California and Florida state law claims was held in abeyance pending briefing by the parties on the court's jurisdiction. The individual who controlled the web developer was ordered to show cause why his pro se claims that had earlier been stayed should not be dismissed. After considering the relevant factors, the court resolved the "close question" of leave to amend by granting leave with strict conditions to the plaintiffs (Greenflight Venture Corp. v. Google LLC, No. 9:24-cv-80395-RLR (S.D. Fla. Nov. 8, 2024).

Background. Greenflight Venture Corp. (Greenflight) is a close corporation owned by Dr. Jeff Isaacs, a medical school graduate whose completion of the residency requirements necessary for successful licensure as a neurosurgeon were interrupted by his health problems. Despite his personal medical issues, Dr. Isaacs developed and was issued a patent for reverse telephone number search technology. Partial ownership of the patent were transferred to Greenflight, which uses the patented technology to enable a telephone user to identify the caller of an incoming telephone call through a start-up Internet venture developed and organized by Isaacs. The technology's coverage of cell phones was an advance from the limitations to landline telephone numbers in the caller identification services theretofore available. The technology uses "vertical searching," that is, a search within a specialized universe of data (e.g., medical data, law data, chemical data, etc.).

Greenflight and Isaacs filed a putative class action lawsuit against Google, alleging that (1) Google's general search engine results ranking system constitutes a monopoly that harms Greenflight's vertical searches for reverse telephone numbers by reducing the internet traffic the Greenflight-enabled search utilities receive from Google's general search engine; and (2) Google infringes upon the patent owned by Isaacs and Greenflight in the apps it sells to owners of cellphones. Google was granted dismissal of the patent infringement claim to the extent that it was personally asserted by Isaacs, who appeared pro se in the case; all of Isaacs's other pro se claims were stayed. Google has moved for dismissal of all the remaining claims.

Sherman Act claims. The court found that Greenflight did not plausibly plead standing to assert its Sherman Act claims. The relevant market alleged by Greenflight (and also by Isaacs in his stayed pro se claims) was the general search services market. While conceding that it was not a participant in that alleged market, Greenflight alleged that it nevertheless had standing because the services it purveys are "inextricably linked to the general search services market." The court found that Greenflight did not show such inextricable linkage. Here, Greenflight did not plead that it was used as an instrumentality by Google to harm Google's competitor search engines. Merely feeling incidental injury from the effects of an alleged monopoly is not sufficient. Moreover, Greenflight's market definitions were overly broad, and defeated its Sherman Act claims of specific intent to monopolize.

As for Greenflight's unreasonable restraints of trade claim per Section 1 of the Sherman Act, the court also dismissed it because (1) Greenflight's claims on this count were premised upon pleadings of an unrelated party in a separate case decided on appeal in a different circuit [Dreamstine.com, LLC v. Google LLC, 54 F.4th 1130, 1134 (9th Cir. 2022)]; (2) the allegation contained no plausibly alleged supporting facts; and (3) the alleged "agreement between two or more persons to restrain trade" was based upon agreements between Google and Apple, which had no connection to the allegations in the case.

The refusal to deal claim was likewise dismissed because Greenflight' pleadings stated that it still used and relied upon Google's search results.

Patent infringement. The court dismissed Greenflight's patent infringement claim. Here, Greenflight had conceded that its claim was for indirect patent infringement, which requires infringement by a third-party as a basis for holding the indirect infringer liable. No such relevant infringing product plausibly identified by Greenflight in its complaint.

State law claims. Having dismissed all of Greenflight's federal law causes of action, the court was unsure as to whether it could exercise jurisdiction over the Florida and California state consumer protection law causes of action that remained. The court exercised its discretion to decline supplemental jurisdiction over those claims, but directed the parties to submit briefs on the issue of whether the court could exercise jurisdiction under the federal Class Action Fairness Act (CAFA) [28 U.S.C. §§1711 – 1715], and deferred consideration of the state law claims' legal sufficiency.

Leave to amend. The court granted Greenflight and Isaacs leave to amend their pleading after weighing the factors. The court found that Isaacs should not be accorded the relaxed standard availed to pro se plaintiffs because (1) although appearing pro se in his own right, Isaacs himself engaged experienced counsel to represent the Greenflight entity he owned controlled; (2) Isaacs has a record of initiating arguably vexatious litigation in other matters; and (3) Isaacs attended law school for two years.

Greenflight's previous amendment of its complaint and "facts to suggest that the Plaintiffs have leveraged discovery in this case to harass the Defendant" weighed against granting leave to amend, but the case was less than seven months old and no deadline for amended pleadings had been set. The court accordingly granted leave to amend, directing that the motion to amend include an attached exhibit of the intended amended complaint.

The Case is No. 9:24-cv-80395-RLR.

Judge: Rosenberg, R.

Attorneys: Ayelet Gaito Faerman (Faerman Law P.A.) for Jeff Isaacs. Aaron P. Maurer (Williams & Connolly, LLP) for Google LLC.

Companies: Google LLC

Cases: Antitrust FloridaNews StateUnfairTradePractices