Google was also at fault, because they had to provide a reason for disabling his account. I think it was correct to sue them at least for discouraging such a practice in the future. He was their customer, it is too much to ask for at least a one sentence response from human?
He should have put some content up on the domain before putting the advertisements up. If you have this sort of traffic, why not monetize it properly in a way that doesn't violate the terms of service?
Expecting Google to be as responsive as his own business simply because he is the boss is unrealistic. Nice to see Google giving some young legal interns experience this way. They probably save considerably over having more experienced counsel handle it.
Your claim that putting AdSense on a domain without first publishing some content is against the Google TOS is unsubstantiated. In fact, Google actually advocates publisher to monetize their unused domains with the Adsense for Domains program.
Even if the step was against the TOS, Google should have communicated it clearly and set the record straight. The author doesn’t begrudge that Google disabled his account, rather that Google didn’t inform him the reason for disabling.
And I just want to chime in here and state that I'd be miffed if I had a domain up, generating clicks for Google (in the story the author claims there was no click fraud, and i choose to believe him) and they shut down your account, without reason, and refund money.
Then, two days later, the TOS violation he did is okay, but through another program.
The crux of this, is that the clicks he sent to advertisers (and the eyeballs) were real. If I'm selling a product, I don't care if my customers find me from search results or a squatted domain. All I care about is closing the sale and increasing my business.