Google Avoids Liability for Failed Google Search Appliance Installation–Market America v. Google

By Eric Goldman

Market America, Inc. v. Google, Inc., 2010 WL 3156044 (D. Del. Aug. 9, 2010)

This lawsuit comes from an unhappy Google Search Appliance (GSA) customer, Market America, who (like many unhappy systems purchasers) claims that Google and its systems integrator LTech overpromised and underdelivered. Unfortunately for Market America, like so many unhappy customers, it didn’t get the necessary promises in writing. As a result, the defendants knock out a chunk of the case.

Market America operates an online mall. I don’t exactly understand its value proposition; see if you can figure it out. It wanted a mallwide search functionality that scaled to nearly 100M products. Market America entered into a million dollar contract for GSAs to provide that functionality. The implementation did not go well (with allegedly very long search latencies), and ultimately Market America gave up on the GSA implementation.

The fraud/fraudulent inducement claims are dismissed per Twombly for conclusory allegations about scienter. Even if Market America’s allegations about Google’s and LTech’s performance promises are true, Market America didn’t adequately plead that Google or LTech had the requisite scienter to make false promises.

The rescission claim is dismissed because neither Google nor LTech promised a minimum quantified performance standard in their contracts, and the contracts contained standard vendor-favorable risk mitigation clauses. As usual, if buyers really care about a promise made by the vendor, make sure the promise gets into the contract.

Trivia: I had previously blogged about Market America in a jurisdictional matter. Market America has a surprisingly active litigation docket for a mass-market consumer-facing company I haven’t heard of otherwise.