Judge Mehta dismisses Chegg and Penske AI search suits without prejudice
Judge Amit Mehta threw out the antitrust suits that Chegg and Penske Media Corporation brought over Google’s AI Overviews, and the coverage all led on one line from the ruling. The one page order that actually ends the Penske case says something the write-ups skipped: the dismissal is “without prejudice,” and it’s “a final, appealable order.” The judge also never ruled on the publishers’ unjust enrichment claims at all.
Mehta signed the 41 page memorandum opinion on September 30, 2026, and it disposes of both cases at once. It dismisses all six counts in Chegg’s amended complaint and all seven in Penske’s. The Verge, Ars Technica and Engadget each quoted the same sentence from page 20.
Plaintiffs have pleaded only that they have an “expectation” that Google will send them search traffic if they make their content available for free. But an expectation is not an agreement. It is simply how a general search engine works.
Amit P. Mehta, United States District Judge, memorandum opinion, page 20
That holding sank the reciprocal dealing counts, which the opinion calls the heart of both complaints. Reciprocal dealing needs a deal, and Mehta found no pleaded facts showing one. The publishers argued for an implied agreement built from a “historical course of dealing,” which the judge rejected because they pleaded no price, no quantity and no communications with Google.
The claim the court didn’t decide
Both companies also sued for unjust enrichment under California law, and that claim got no merits ruling. Having dismissed every federal count, Mehta declined to exercise supplemental jurisdiction and dismissed it on that basis alone. All parties had agreed California law governed, so a state court is still open to them. None of the three write-ups mentioned the claim.
| Claim | Basis | Why it failed |
|---|---|---|
| Reciprocal dealing | Sherman Act Section 1 | No agreement pleaded |
| Reciprocal dealing | Sherman Act Section 2 | No dealing relationship to coerce |
| Tying, Penske only | Section 2 | Search and AI Overviews are one product |
| Monopoly maintenance | Section 2 | No antitrust standing |
| Leveraging and attempted monopolisation | Section 2 | Second markets implausibly defined |
| Unjust enrichment | California law | Not decided, jurisdiction declined |
The tying ruling is the one worth reading if you build for search. Penske argued Google forces users to take AI Overviews alongside general search, so the two are tied products. Mehta found they’re a single integrated product instead, and one reason he gave was that DuckDuckGo puts a generative summary at the top of its results too. Penske’s own brief conceded that point.
Mehta had already said this in March
What the opinion makes plain, and the coverage didn’t, is that this wasn’t a first look at the theory. Mehta rejected nearly the same publisher argument in the Helena World Chronicle case on March 20, 2026, and the opinion cites it repeatedly. He also cites his July 13, 2026 ruling in the Sensory case on standing, writing that these plaintiffs fail “as with other plaintiffs appearing before this court.”
On market definition he was blunter still. Penske defined online publishing as essentially all text published online, and Mehta called that “implausibly overbroad,” noting that a blog post, a legal brief and a news article aren’t substitutes. Penske also never tried to quantify Google’s share of it. Chegg’s narrower education market fared slightly better, but the judge said he couldn’t tell a pedagogical product from a merely informational one.
The sympathy that Ars Technica flagged is real and sits on page 25. Mehta writes that he isn’t “unsympathetic to the situation publishers now find themselves in,” then quotes the Areeda and Hovenkamp antitrust treatise for the view that antitrust statutes aren’t “in any sense a substitute for” a legislature addressing “economic dislocation caused by new innovation.” He adds that any gap in the law’s reach is “an issue for Congress [or regulators] to consider.” Industry has spent the year arguing that new AI laws are unnecessary.
So watch two clocks rather than one. The order’s “final, appealable” language puts an appeal on the table now, and the without prejudice label plus the undecided state law claim give the publishers somewhere else to go. The Penske docket shows the case terminated on September 30 after a consolidated hearing on August 25. Private antitrust cases against large AI companies keep narrowing before trial, and this one narrowed on pleading, not on the facts.
Get the daily rundown
One email each weekday with the AI news that matters, every claim linked to its primary source.
Free, one email each weekday, unsubscribe in one click. We never sell or share your address.
