I worked for a company who had this happen to an internal development domain, not exposed to the public internet. (We were doing security research on our own software, so we had a pentest payload hosted on one of those domains as part of a reproduction case for a vulnerability we were developing a fix for.)
Our lawyers spoke to Google's lawyers privately, and our domains got added to a whitelist at Google.
It depends, if it's a clear-cut case, then in jurisdictions with a functioning legal system it can be feasible to sue.
Likewise, if it's a fuckup that just needs to be put in front of someone who cares, a lawsuit is actually a surprisingly effective way of doing that. This moves your problem from "annoying customer support interaction that's best dealt with by stonewalling" into "legal says we HAVE to fix this".
I’m not a lawyer, but this hasn’t ever been taken to court, has it? It might qualify as libel.