(CN) — An appeals court ruled Wednesday South Carolina's parks department cannot claim immunity as it tries to avoid answering a subpoena in an antitrust lawsuit against Google.
U.S. Circuit Judge Steven Agee wrote on behalf of a three-judge panel in a unanimous opinion published Wednesday that South Carolina waived sovereign immunity for itself and its agencies when it joined a multi-state lawsuit claiming the tech giant wielded undue influence in the online advertising industry.
Attorneys for the South Carolina Department of Parks, Recreation and Tourism argued at a May 8 hearing in the Fourth Circuit Court of Appeals that the state’s attorney general did not represent the state in the antitrust litigation but instead “the general public and consumers” of South Carolina.
The distinction meant the parks department could use an immunity defense to avoid answering Google’s subpoena for records related to its use of the company’s display advertising products, the attorneys argued.
Google's lawyers countered that the state waived immunity for its agencies when it filed the suit.
Agee, an appointee of George W. Bush, rejected the argument and affirmed a decision by Senior U.S. District Judge Joseph F. Anderson, who found the state’s immunity was indivisible.
"Because SCPRT’s immunity derives solely from that of the state, South Carolina’s waiver of Eleventh Amendment immunity equally effected a waiver of SCPRT’s immunity," Agee wrote.
The attorney general and the parks department both derive their authority from the state. By filing suit in federal court, the attorney general waived any right the state or its agencies have to immunity, Agee reasoned.
“If an arm of a state enjoys Eleventh Amendment immunity only by virtue of its relation to the state, it necessarily follows that when the state waives its immunity, then there no longer remains any immunity that the arm may assert,” Agee wrote. “Put simply, the arm is the state, and the state is the arm.”
The judge also pointed out that South Carolina itself had previously endorsed Google's subpoena methods.
Google first attempted to serve document requests on the various state attorneys general, who refused the requests on the basis that they did not have authority to search through other agencies' documents.
The tech giant followed up with direct subpoenas to the state agencies, including South Carolina's park department. In a subsequent letter to Google, the plaintiff states approved this new tactic.
"It would be 'fundamentally unfair' to Google to permit SCPRT to invoke Eleventh Amendment immunity in response to a subpoena that the state itself told Google was 'the proper channel' for seeking documents pertinent to the company’s defense," Agee said.
Agee was joined in the 13-page opinion by U.S. Circuit Judges Stephanie D. Thacker, a Barack Obama appointee, and Senior U.S. Circuit Judge William B. Traxler Jr., a Bill Clinton appointee.
In the antitrust lawsuit from 2020, South Carolina and 16 states led by Texas claim that Google has monopolized the online ad business and uses its market power to stifle competition. The states claim the tech giant struck an unlawful agreement with Facebook to manipulate advertising auctions.
The group of states say Google agreed to manipulate its monthly auctions, on which it sells mobile app ad space for publishers, to predetermine how many times Facebook would bid and win. In return, Facebook would reportedly back off from header bidding.
According to the states, this is but one way Google and Facebook have monopolized the market, and Americans' privacy has suffered from their scams. The states also claim Google forced online publishers to license its software to do business with over 1 million advertisers who used it as their middleman.
A trial in the antitrust case is scheduled to begin March 2025 in Plano, Texas.
The U.S. Department of Justice and a separate coalition of states made similar claims in their own lawsuit filed in 2023.
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