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Steven D' Agostino v. Appliances Buy Phone

September 14, 2011


The opinion of the court was delivered by: Peter G. Sheridan, U.S.D.J.


This matter began in the Superior Court of New Jersey. Soon thereafter, Google removed the case to this Court, and thereafter four motions were filed: (1) Defendant Google Corporation's ("Google") motion to transfer venue to the Northern District of California ("Google's Motion to Transfer"); (2) Plaintiff Steven D'Agostino's ("Plaintiff") motion to remand ("Plaintiff's Motion to Remand"); (3) Defendants Appliances Buy Phone, Inc. ("ABP"), Steven Sigman ("Mr. Sigman"), Cheryl Sigman's ("Mrs. Sigman") motion to dismiss and (4) Plaintiff's motion to strike Mr. Sigman's amended counterclaim ("Mr. Sigman's Amended Counterclaim").

On January 18, 2011, Plaintiff filed an amended complaint. The major purpose of the amendment was to delete federal causes of action against Google and ABP as a means to remand the case to state court. Accordingly, Plaintiff asserts common law causes of action against the Sigmans and ABP. Plaintiff changed his causes of actions against Google alleging federal antitrust violations to agent's negligence causing harm; competition unlawfully restrained; and unfair competition.


On January 31, 2011 Mr. Sigman filed an Amended Counterclaim. He alleges that Plaintiff violated the New Jersey Consumer Fraud Act (the "NJCFA"); as well as acted negligently and breached a contract.


Plaintiff, pro se, is a website developer. ABP is an online retailer of large home appliances. Mr. Sigman is the sole shareholder of ABP and chief officer who operates ABP. Mrs. Sigman is a key employee of ABP (but not a shareholder). Google provides many services and products including an internet search engine and web browser "Chrome."

In August 2003, Mr. Sigman and Plaintiff agreed that Plaintiff would develop a website for marketing ABP products (the "First Website"). The included a customized search engine, shopping cart, and online payment system. Oddly, the contract was between Mr. Sigman, individually, and the Plaintiff for the benefit of ABP*fn1 . Plaintiff agreed to construct the First Website for a fixed fee of $1500. Plaintiff maintains that despite "what was common with all of [Plaintiff's] competitors at that time, Plaintiff did not ask for any recurring fees."

In addition to these tasks, Plaintiff also performed other services for Mr. Sigman and ABP. (Plaintiff's Amended Complaint, ¶¶ 16-20, 34-36). For example, Plaintiff's tasks at this time included: writing a 'very long and detailed specification requirement' for the proposed new code, writing new software to read newly-acquired product data, making "scripts" to save and store thousands of product images before they were removed by a third party who is purported to have been unscrupulous ("Ackerman"), re-writing the ABP website code yet again, and 'dropp[ing] what I was doing to help' during late night emergencies, while on the road, and while on vacation.

For services outside the scope of the Agreement, Defendants requested that Plaintiff provide an invoice detailing the work that he performed and the associated costs. Instead of detailing the costs of all his services, however, Plaintiff submitted a limited invoice for a certain services that he performed. According to Plaintiff, although he did not provide ABP with a list of all services rendered, Plaintiff still expected Mr. Sigman to compensate Plaintiff for all services rendered. Although disappointing to Plaintiff, but much to be expected, Plaintiff received payment only for the services specified in the invoice.

In 2008, Plaintiff built Mr. Sigman a special CMS (Content Management System) tool which more quickly uploaded product data and pictures onto his website helped him. For this service, Plaintiff requested that Mr. Sigman pay him "what he thought was fair." Once again, his expectation was met. Plaintiff thought he deserved $12,000 for this service, but Mr. Sigman paid him $4,000.

In the summer of 2009, Mr. Sigman suggested that Plaintiff improve on the search engine optimization ("SEO") skills in order to assist ABP in promoting the First Website. According to Plaintiff, instead of seeking an hourly wage, Plaintiff and Sigman agreed to develop a new website (the "Second Website") -- with a different URL -- and each party would allegedly receive fifty percent of the profits generated from the Second Website. Mr. Sigman's First Website's domain name was Mr. Sigman also owned the domain name of the Second Website ( Both websites operated at the same time, which allowed customers to purchase appliances from either site. After Plaintiff developed the Second Website over a several month period, it was launched in October 2009.

The Second Website posted the product data on Google Products to increase marketing. Google Products are "an online service that allows computer users to type product queries and obtain lists of vendors and pricing information for particular products." As the Second Website developer, Plaintiff registered ABP for this service with Google. By registering, either Sigman or Plaintiff entered into an agreement with Google and agreed to comply with the Google Merchant Center Terms of Service ("Google Merchant Agreement"). The most relevant provision reads:

Choice of Law and Forum. The Terms of Service and the relationship between you and Google shall be governed by the laws of the State of California without regard to its conflict of law provisions. You and Google agree to submit to the personal and exclusive jurisdiction of the courts located within the county of Santa Clara, California. (Google Merchant Agreement, p. 10) (emphasis added). After several months, the sales significantly increased on the Second Website. In the month of June, 2010, ABP received over $30,000 worth of orders from Plaintiff's Second Website. In July 2010, Mr. Sigman instructed Plaintiff to stop selling air conditioners due to limited supply. Despite this mandate, Mr. Sigman continued to sell air conditioners on the First Website, thereby depriving Plaintiff of the opportunity to earn commission.

Around this same time, the Second Website experienced many glitches, and sales on the Second Website immediately stopped. As it turns out, Google Products shut down the Second Website temporarily because it identified the First Website and the Second Website as duplicative websites which breached one of Google's Merchant Center Terms. Around the same time, Mr. Sigman had experienced glitches on the First Website, and Mr. Sigman believed was related to Google's disapproval of the Second Website as duplicative. In response, Mr. Sigman, after discussing it with Google, ceased operating the Second ...

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