2019 03:27 PM

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
MATCH GROUP, INC., MATCH GROUP, LLC and IAC/INTERACTIVECORP,
Plaintiffs,
x : : : : : : : : : : : : : x
Index No. 650287/2019 Part 39 Hon. Saliann Scarpulla Motion Sequence No. ___ ORAL ARGUMENT REQUESTED
MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT SEAN RAD’S MOTION TO DISMISS
GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue New York, NY 10166-0193 Telephone: (212) 351-4000
Attorneys for Sean Rad Dated: March 25, 2019
FILED: NEW YORK COUNTY CLERK 03/25/2019 03:27 PM INDEX NO. 650287/2019
NYSCEF DOC. NO. 16 RECEIVED NYSCEF: 03/25/2019
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I. Rad Creates Tinder And Becomes Tinder’s CEO. ............................................. 4
II. In 2014, Rad Negotiates Agreements Guaranteeing Him Long-Term Equity In Tinder............................................................................................... 5
III. Rad Signs The Amendment Agreement, Granting Him Broad And Continuing Rights To Possess And Use Confidential Information. ..................... 5
IV. Rad Sues, Prompting Match To File This Retaliatory Action. ............................ 7
LEGAL STANDARD ............................................................................................................ 7
I. The Breach Of Contract Claim Must Be Dismissed. .......................................... 8
A. The Amendment Agreement Forecloses Match’s Contract Claim. .......... 8
1. Rad Had Broad Rights To Possess And Use Confidential Information During His Employment As Tinder CEO. ...............10
2. Rad’s Broad Rights To Possess And Use Confidential Information Continued After He Left Tinder. ............................10
3. The Amendment Agreement Overrides Any Conflicting Obligations On Which Match Relies. ........................................12
a. Rad’s Rights Under the Amendment Agreement Expressly Trump His Earlier Confidentiality Obligations. ..................................................................12
b. Reading The Agreements Together, Match Fails To Allege A Breach............................................................13
B. Match Has Not Adequately Pleaded Damages.......................................15
1. The Complaint Seeks An Impermissible Windfall, Not Legally Cognizable Breach-Of-Contract Damages. ....................15
2. The Complaint Does Not Allege Match Could Have Fired Rad For “Cause.”......................................................................17
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3. Match’s Damages Are Impermissibly Speculative. ....................18
4. Match Fails To Allege Damages From Rad’s Retention Of Confidential Information...........................................................20
II. The Unjust Enrichment Claim Must Be Dismissed. ..........................................21
CONCLUSION .....................................................................................................................22
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Page(s)
Cases
150 Broadway N.Y. Assos., L.P. v. Bodner, 784 N.Y.S.2d 63 (1st Dep’t 2004) .......................................................................................8
ACE Sec. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015) ....................................................................................................... 21
Alarmex Holdings, LLC v. JP Morgan Chase Bank, N.A., 48 N.Y.S.3d 19 (1st Dep’t 2017) ....................................................................................... 14
Art Capital Grp., LLC v. Carlyle Inv. Mgmt. LLC, 55 N.Y.S.3d 54 (1st Dep’t 2017) .........................................................................................8
Atlantis Info. Tech., GmbH v. CA, Inc., 2011 WL 4543252 (E.D.N.Y. Sept. 28, 2011) .................................................................... 19
Bakal v. U.S. Bank Nat’l Ass’n, 747 F. App’x 32 (2d Cir. 2019) ......................................................................................... 17
Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573 (2d Cir. 2006) .............................................................................................. 21
Cent. Laborers’ Pension Fund v. Dimon, 2014 WL 3639185 (S.D.N.Y. July 23, 2014) ..................................................................... 22
Cisneros v. Alpine Ridge Grp., 508 U.S. 10 (1993)............................................................................................................ 12
Citidress II Corp. v. Tokayer, 962 N.Y.S. 2d 691 (2d Dep’t 2013) ................................................................................... 19
Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382 (1987) ....................................................................................................... 21
Cohen v. S.A.C. Trading Corp., 711 F.3d 353 (2d Cir. 2013) .............................................................................................. 21
Commander Oil Corp. v. Advance Food Serv. Equip., 991 F.2d 49 (2d Cir. 1993) ................................................................................................ 14
Cornell Glasgow, LLC v. LaGrange Properties, LLC, 2012 WL 6840625 (Del. Super. Ct. Dec. 7, 2012) .............................................................. 18
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Page(s)
iv
Digizip.com, Inc. v. Verizon Servs. Corp., 139 F. Supp. 3d 670 (S.D.N.Y. 2015) ................................................................................ 21
Elledge v. Friberg-Cooper Water Supply Corp., 240 S.W.3d 869 (Tex. 2007) ............................................................................................. 21
Freund v. Washington Square Press, Inc., 34 N.Y.2d 379 (1974) ....................................................................................................... 16
Godfrey v. Spano, 13 N.Y.3d 358 (2009) ................................................................................................... 8, 14
Gordon & Breach Sci. Publishers, Inc. v. N.Y. Sys. Exch., Inc., 699 N.Y.S.2d 673 (1st Dep’t 1999) ................................................................................... 20
Gosden v. Elmira City Sch. Dist., 934 N.Y.S.2d 256 (3d Dep’t 2011) .................................................................................... 16
Grika ex rel. McGraw, 76 N.Y.S.3d 546 (1st Dep’t 2018) ..................................................................................... 22
Helmerich & Payne Int’l Drilling Co. v. Swift Energy Co., 180 S.W.3d 635 (Tex. App. 2005) ..................................................................................... 13
JFK Hotel Owner, LLC v. Hilton Hotels Corp., 986 N.Y.S.2d 866 (Sup. Ct. 2014) ..................................................................................... 20
Jones v. Voskresenskaya, 5 N.Y.S.3d 16 (1st Dep’t 2015) ......................................................................................... 14
Kantor v. 75 Worth Street, LLC, 945 N.Y.S.2d 245 (1st Dep’t 2012) ................................................................................... 20
Kenford Co. v. Cty. of Erie, 67 N.Y.2d 257 (1986) ....................................................................................................... 16
Keysight Techs., Inc. v. Mentor Graphics Corp., 2017 WL 7310781 (N.D. Cal. Sept. 28, 2017).................................................................... 17
Kolchins v. Evolution Mkts., Inc., 8 N.Y.S.3d 1 (1st Dep’t 2015) .............................................................................................8
Leon v. Martinez, 84 N.Y.2d 83 (1994) ...........................................................................................................8
Lloyd v. Town of Wheatfield, 67 N.Y.2d 809 (1986) ....................................................................................................... 18
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Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173 (2011) ....................................................................................................... 21
Nat’l Mkt. Share, Inc. v. Sterling Nat’l Bank, 392 F.3d 520 (2d Cir. 2004) .............................................................................................. 16
O’Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756 (9th Cir. 1996) ............................................................................................... 19
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) ................................................................................................ 11
In re Pfizer Inc. S’holder Derivative Litig., 722 F. Supp. 2d 453 (S.D.N.Y. 2010) ................................................................................ 22
Quadrant Structured Prods. Co. v. Vertin, 23 N.Y.3d 549 (2014) ....................................................................................................... 11
Rad et al. v. IAC/InterActiveCorp et al., No. 654038/2018 ...................................................................................................... 1, 7, 21
RXR WWP Owner LLC v. WWP Sponsor, LLC, 43 N.Y.S.3d 298 (1st Dep’t 2016) ..................................................................................... 17
Scentsational Techs., LLC v. Pepsico, Inc., 2018 WL 2465370 (S.D.N.Y. May 23, 2018) ..................................................................... 15
Schron v. Troutman Sanders LLP, 945 N.Y.S.2d 25 (1st Dep’t 2012) ..................................................................................... 14
Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210 (2010) ............................................................................................ 10
Skillgames, LLC v. Brody, 767 N.Y.S.2d 418 (1st Dep’t 2003) ............................................................................... 8, 19
Sky Top Farms, Inc. v. Bilinski Sausage Mfg. Co., 904 N.Y.S.2d 2 (1st Dep’t 2010) ....................................................................................... 15
SM Energy Co. v. Sutton, 376 S.W.3d 787 (Tex. App. 2012) ..................................................................................... 14
Soc’y of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761 (1991) ....................................................................................................... 14
Suffolk Cty. Water Auth. v. Vill. of Greenport, 800 N.Y.S.2d 767 (2d Dep’t 2005) .................................................................................... 13
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Page(s)
vi
TBA Glob., LLC v. Fidus Partners, LLC, 15 N.Y.S.3d 769 (1st Dep’t 2015) ..................................................................................... 13
TSL (USA) Inc. v. OppenheimerFunds, Inc., 977 N.Y.S.2d 638 (1st Dep’t 2014) ................................................................................... 19
U.S. Bank Nat’l Ass’n v. GreenPoint Mortg. Funding, Inc., 45 N.Y.S.3d 11 (1st Dep’t 2016) ....................................................................................... 17
United States v. Cancer Treatment Ctrs. of Am., 350 F. Supp. 2d 765 (N.D. Ill. 2004).................................................................................. 22
Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) ............................................................................................. 21
VTR, Inc. v. Goodyear Tire & Rubber Co., 303 F. Supp. 773 (S.D.N.Y. 1969) .......................................................................................8
W. Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2007 WL 3317551 (Del. Ch. Nov. 2, 2007) ....................................................................... 13
Zamora v. Morphix Co., 2018 WL 1033228 (S.D.N.Y. Feb. 21, 2018) ..................................................................... 19
Rules
Other Authorities
Antonin Scalia & Brian A. Garner, Reading Law: The Interpretation of Legal Texts 126 (2012) ............................................................................................................... 12
Black’s Law Dictionary (10th ed. 2014) .................................................................................. 10
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1
Defendant Sean Rad (“Rad”) respectfully submits this memorandum of law in support of
his Motion to Dismiss the Complaint of Plaintiffs Match Group, Inc.; Match Group, LLC (together,
“Match Group”); and IAC/InterActiveCorp (“IAC”) (collectively, “Match”) pursuant to CPLR
3211(a)(1) and (7).
PRELIMINARY STATEMENT
Sean Rad is the Founder and former CEO of Tinder, one of the fastest-growing startups in
history. Rad founded Tinder in February 2012 and led the company until September 2017, taking
it from an idea to a company that was recently valued as high as $19 billion by independent Wall
Street analysts. On August 14, 2018, Rad and his co-founders sued Match in this Court for over
$2 billion for breach of contract and tortious interference arising from Match’s scheme to
undervalue Tinder and deprive the founders of valuable equity in the company they built. See Rad
et al. v. IAC/InterActiveCorp et al., No. 654038/2018 (the “Rad Action”). On January 15, 2019—
nearly 18 months after Rad left Tinder and five months after Rad and his co-founders sued Match
for breach of contract—Match filed this retaliatory lawsuit, claiming Rad breached his agreements
with Match when he backed up Tinder emails and retained them after leaving the company, all of
which Match knows Rad had the contractual right to do. See Ex. A ¶¶1-5, 51 (“Compl.”). Match
does not allege Rad disclosed confidential information, used it to start a competing venture, or for
any other improper purpose. In fact, Match alleges no competitive injury whatsoever. Instead,
Match says Rad’s mere backing up and retention of company emails entitles it to claw back from
him “not less than $250 million” in equity compensation.
This claim fails as a matter of law. There was no breach, there is no claw-back right, and
the crazy amount Match seeks is more than Rad made for creating Tinder and significantly less
than the billions of dollars in profits Match gained from Tinder and Rad’s hard work. Match’s
true purpose here is clear—to punish Rad for attempting to vindicate his legal rights. But this
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2
lawsuit cannot proceed, and should be summarily dismissed, for a simple reason: Rad’s contract
gives him the express right to possess and use the Tinder emails—both during and after his
employment, including in connection with the Rad Action.
The express terms of Rad’s governing 2014 agreement (the “Amendment Agreement”) are
clear. They allow Rad to back up his work emails, to retain them after he left Tinder, and to use
them during and after his employment for several reasons, including “in any legal dispute with
Tinder, Hatch or any of their respective affiliates.” Ex. B §2. Of course, that is exactly what Rad
is alleged to have done: relied on Tinder documents he retained after he left the company to file
and prosecute the Rad Action. Compl. ¶¶51-52. Match’s breach of contract claim is barred by the
express terms of the Amendment Agreement. That is the end of this case.
Match’s breach of contract claim should be dismissed for an independent reason: its
speculative damages theory fails as a matter of law. Match alleges that had it known Rad—
Tinder’s Founder and CEO—periodically backed up his emails, it would have terminated him for
“Cause” and stripped him of no less than a quarter-billion dollars in equity. Compl. ¶¶4-5, 67.
This theory is legally defective and preposterous on its face.
First, the law does not permit the recovery of claw-back damages that were not caused by
the alleged breach or provided for by contract. Match effectively asks this Court to invent an
equity claw-back penalty in Rad’s employment agreements even though the parties never agreed
to one. Second, the Complaint does not even plead that Match could have theoretically terminated
Rad for “Cause,” as Rad’s employment contracts guaranteed him between 10 and 30 days to cure
any violation before he could be terminated for “Cause.” E.g., Ex. C §2(b)(ii)(1). Match does not
plead Rad was given notice of his purported breaches—it omits the notice-and-cure provisions
entirely. Third, even if properly pleaded, Match’s theory of damages is impermissibly vague and
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3
speculative as a matter of law. Match asks this Court to assume not only that Match would have
fired Rad for backing up his documents (absent any allegation it has ever enforced a confidentiality
policy in this way), but also that Rad would have refused to return them after receiving notice of
this purported breach. The notion that Rad would have voluntarily risked being terminated for
“Cause” rather than cure is ludicrous. Fourth, Match does not allege any damages arising from
Rad’s retention of documents after he had already left Tinder. For these reasons, Match’s attempt
to manufacture damages from Rad’s non-existent breaches fails.
Upholding Match’s fanciful damages theory, even at the pleading stage, would reward
punitive and unjust litigation. It would allow employers—in the absence of any specifically
negotiated claw-back or liquidated damages provision for confidentiality violations— to
manufacture pretextual reasons to sue former employees and seek to strip them of earned
compensation, years after their relationship ended. This is patently unfair and contrary to law.
Match’s unjust enrichment claim also should be dismissed. It is barred by the existence of
the very contracts Match alleges were breached. And Match cannot claim Rad has been unjustly
enriched because he was paid in consideration for developing Tinder into a multibillion-dollar
company.
This lawsuit is a transparent act of retaliation against Rad for exposing Match’s scheme to
undercompensate Tinder’s founders and employees. That scheme put billions of dollars into
Match’s coffers—far more than Rad and the entire founding team of Tinder ever received,
combined, for their years of ingenuity and hard work. In this frivolous lawsuit, Match now tries
to cheat Rad of even more money, seeking to claw back hundreds of millions in equity
compensation that Rad earned for creating and building Tinder—and all because Rad did what his
contract authorized him to do. The Complaint should be dismissed.
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I. Rad Creates Tinder And Becomes Tinder’s CEO.
Sean Rad is a successful tech entrepreneur who invented and founded Tinder—one of the
most popular apps in history—with the help of his co-founders. Rad founded Tinder in 2012 and
led the company until 2017, in roles ranging from CEO, President, to Chairman. Rad and his co-
founders built Tinder from an unknown start-up into a global brand that has brought the world
closer with countless relationships that otherwise would have never existed. Based on the ideas
and innovations of Rad and his co-founders, Tinder earned more than $800 million in profits in
2018 and independent Wall Street analysts have recently valued Tinder as high as $19 billion.
Rad came up with the idea for Tinder prior to joining Hatch Labs (“Hatch”), a tech
incubator partially owned by IAC, and developed Tinder on his free time while there. Compl. ¶¶6,
14. At Hatch, Rad signed two agreements: an Offer of Employment letter (“Hatch Employment
Agreement”) and a Confidentiality and Intellectual Property Agreement (“Hatch Confidentiality
Agreement”) (together, the “Hatch Agreements”). Among other things, these agreements
contained enumerated confidentiality provisions and guaranteed Rad would be given notice and
an opportunity to cure before he could be terminated for “Cause” based on any purported breach
of his confidentiality obligations. Ex. D §7.
With little support from Match, Rad and his co-founders launched Tinder, Inc. in March
2013 with Rad as CEO. Compl. ¶22. Match bought out the minority shareholders in Hatch, such
that Match owned 100% of Hatch and Tinder, Inc. Id. ¶6. Match shuttered Hatch in or around
2014.
Following Tinder’s launch, Rad signed two agreements: a Terms of Employment letter
(“Tinder Employment Agreement”) and an At-Will, Confidentiality & Inventions Agreement
(“Tinder Confidentiality Agreement”) (together, the “Tinder Agreements”). These agreements
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also included certain confidentiality obligations, but again ensured Rad would be given notice and
an opportunity to cure before he could be terminated for “Cause” based on any purported breach
of his confidentiality obligations. Ex. F §8.
II. In 2014, Rad Negotiates Agreements Guaranteeing Him Long-Term Equity In Tinder.
By 2014, Tinder’s success had skyrocketed. In July 2014, after six months of negotiations,
Rad and his Tinder colleagues signed contracts with IAC that, among other things, awarded
Tinder’s founders and early employees stock options in Tinder, provided when those options could
be exercised, defined an independent informational process for valuing the options (the
“Qualifying Valuation Process”), and granted Rad certain protections, including another notice-
and-cure provision. Compl. ¶33. Rad was awarded Tinder options that he could exercise during
one of the contractually-defined “Put” opportunities, including on specific dates in 2017, 2018,
2020, and 2021 (the “Scheduled Puts”), at additional times chosen by Match, or in certain
circumstances after Rad’s departure from Tinder. See Compl. ¶¶34-35; Ex. C §10(b); Ex. H §2.
In sum, these agreements rewarded Rad and his Tinder founders for their hard work and success
by giving them the same rights enjoyed by founders and employees of other tech companies—the
ability to hold and sell their Tinder options over several years, as the value of Tinder increased.1
III. Rad Signs The Amendment Agreement, Granting Him Broad And Continuing Rights To Possess And Use Confidential Information.
At the same time, Rad and Match negotiated and signed the Amendment Agreement. This
agreement grants Rad rights to possess, use, and share Confidential Information—as defined in his
Tinder and Hatch Agreements and in the Amendment Agreement itself—in numerous
circumstances, and states that “[n]othing in the Tinder Agreement or Hatch Agreement [would]
1 The various contracts discussed herein are referred to collectively as the “Agreements.”
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prohibit Mr. Rad’s”:
use or disclosure of Confidential Information in connection with his duties as an employee of Tinder, or use in connection with any Qualifying Valuation Process (as defined in the Tinder 2014 Equity Settlement Plan), or disclosure in connection therewith to any Qualified Bank … or [co-founder Justin] Mateen in connection therewith, or use or disclosure otherwise to any financial, legal, tax or accounting advisor to Mr. Rad, or in any legal dispute with Tinder, Hatch or any of their respective affiliates.
Ex. B §2. Rad’s contractual rights are broad and continuing. First, they give Rad the right to
possess and use Confidential Information during and after his employment at Tinder—including
in any future Qualifying Valuation Process, in any dispute arising therefrom, or in any other
dispute arising with Tinder, Hatch, or their respective affiliates. Second, this Agreement applies
“[n]otwithstanding anything to the contrary in” the Tinder and Hatch Agreements. In this way,
the Amendment Agreement expressly (and intentionally) supersedes any conflicting
confidentiality obligation in those earlier agreements. These rights reflect the reality of Rad’s
CEO position: it was necessary for Rad to have access to and discretion to hold Confidential
Information in order to function day to day, e.g., making copies of company documents to bring
to meetings and saving them on his phone to access them in-flight. Further, the Amendment
Agreement recognizes that Rad’s role as Tinder’s Founder—the value of which entitled him to
significant equity in the company—gave him an ongoing interest in the company, even after his
departure, that could put him at odds with Match.
Rad negotiated these broad and continuing use rights because, among other reasons, he
wanted protection if Match attempted to rob him of his Tinder equity. Rad’s concern proved well-
founded: in December 2016, Match replaced Rad with then-Match Group CEO and Chairman
Greg Blatt. Blatt seized control of Tinder shortly before the first Scheduled Put was to be held in
May 2017. See Compl. ¶59. And, as alleged in the Rad Action, Blatt and other Match executives
executed a scheme to corrupt the Qualifying Valuation Process, cancel the Scheduled Puts in 2018,
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7
2020, and 2021, and cheat Tinder optionholders out of billions. See Rad et al. v.
IAC/InterActiveCorp et al., No. 654038/2018, Dkt. No. 2.
IV. Rad Sues, Prompting Match To File This Retaliatory Action.
In September 2017, Tinder ended its relationship with Rad without “Cause.” Compl. ¶¶49,
60. On August 14, 2018, Rad and Tinder’s co-founders sued Match for its unlawful scheme,
bringing claims for breach of contract and breach of the implied covenant of good faith and fair
dealing, among others, and seeking no less than $2 billion in damages.
On December 24, 2018, in the course of good-faith discovery discussions in the Rad
Action, Rad’s counsel informed Match’s counsel Rad possessed “some backups of his Tinder
email that he created while employed by Tinder.” Id. ¶53. Rad’s counsel explained that while
employed at Tinder, Rad:
(a) created copies of all his Tinder emails in August 2016 and then again in April 2017, (b) used a personal account for Tinder email from approximately September 2012 to the end of his employment, (c) forwarded Tinder emails to a personal email account, (d) created a personal account in or around March 2017 to act as an email client for his Tinder email, and (e) copied non-email Tinder documents dating from approximately January 2013 to July 2017.
Id. ¶54. Rather than ask any further questions, express specific concerns, or seek specific
assurances about Rad’s possession of these documents, Match sued for breach of contract and
unjust enrichment, claiming Rad’s activities violated his “obligations” under the Hatch and Tinder
Agreements, Tinder’s June 12, 2017 Information Security Policy, and other unnamed Tinder
Policies and Procedures. See id. ¶¶29, 51. On January 24, 2019, this Court joined the two actions.
Dkt. No. 6.
LEGAL STANDARD
On a motion to dismiss under CPLR 3211(a), although the Court accepts the complaint’s
factual allegations as true, “factual allegations...that consist of bare legal conclusions, or that are
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inherently incredible or clearly contradicted by documentary evidence are not” accepted as true,
Skillgames, LLC v. Brody, 767 N.Y.S.2d 418, 421 (1st Dep’t 2003), and “are insufficient to survive
a motion to dismiss,” Godfrey v. Spano, 13 N.Y.3d 358, 373 (2009). When “documentary
evidence” such as a contract forecloses allegations of breach, the claim must be dismissed “even
if the allegations, standing alone, could withstand a motion to dismiss.” Kolchins v. Evolution
Mkts., Inc., 8 N.Y.S.3d 1, 8 (1st Dep’t 2015); see also 150 Broadway N.Y. Assos., L.P. v. Bodner,
784 N.Y.S.2d 63, 68 (1st Dep’t 2004).
ARGUMENT
I. The Breach Of Contract Claim Must Be Dismissed.
Match’s breach of contract claim must be dismissed because (a) it is barred by the
Amendment Agreement and (b) Match’s theory of damages is inadequately pleaded.
A. The Amendment Agreement Forecloses Match’s Contract Claim.
When “defendants [are] given the right to do what they did by the express provisions of
the contract there can be no breach.” VTR, Inc. v. Goodyear Tire & Rubber Co., 303 F. Supp. 773,
778 (S.D.N.Y. 1969); see also Art Capital Grp., LLC v. Carlyle Inv. Mgmt. LLC, 55 N.Y.S.3d 54,
55 (1st Dep’t 2017). Here, the Amendment Agreement gives Rad the right to hold Confidential
Information in precisely the manner Match now alleges constitutes a breach. See Kolchins, 8
N.Y.S.3d at 13. The Amendment Agreement “conclusively establishes a defense to the asserted
claims as a matter of law.” Leon v. Martinez, 84 N.Y.2d 83, 88 (1994); see 150 Broadway, 784
N.Y.S.2d at 68.2
2 The various Agreements are governed by New York law, Ex. E §6.3, Texas Law, Ex. G §20, and Delaware law, Ex. C §14. Match’s claims fail under the law of all relevant jurisdictions.
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The Amendment Agreement gives Rad broad rights to possess and use Confidential
Information during and after his tenure at Tinder. This makes perfect sense. Rad was not your
average employee; he was the Founder and CEO of a multibillion-dollar company, and could not
function in that role if not allowed the discretion to use the documents created by the company he
helmed. And, during his tenure at Tinder, Rad was aware his interests were potentially at odds
with Match’s and was concerned it would try to underpay him and the other founders for the
company he built—the most valuable company in Match’s portfolio. To protect himself and his
colleagues, Rad negotiated for certain rights that, among other things, would allow him to use
Tinder Confidential Information to challenge Match if it attempted to violate his contractual rights
as a Tinder optionholder even following his departure from the company. Specifically, the parties
agreed Rad’s use rights under the Amendment Agreement can be exercised “[n]otwithstanding
anything to the contrary in the Tinder Agreement or in the Hatch Agreement,” Ex. B (emphasis
added), and include:
1. “Rad’s use or disclosure of Confidential Information in connection with his duties as an employee of Tinder”;
2. his “use [of Confidential Information] in connection with any Qualifying Valuation Process”;
3. his “disclosure [of Confidential Information] in connection [to any Qualifying Valuation process] to any Qualified Bank...or [Tinder co-founder] Mr. Mateen”;
4. his “use or disclosure [of Confidential Information] otherwise to any financial, legal, tax or accounting advisor”; and
5. his “use or disclosure [of Confidential Information]…in any legal dispute with Tinder, Hatch or any of their respective affiliates.”
Id. §2. As demonstrated below, all of Rad’s allegedly breaching conduct is expressly permitted
by this Agreement.
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1. Rad Had Broad Rights To Possess And Use Confidential Information During His Employment As Tinder CEO.
Match does not allege Rad shared or misused Confidential Information in any way while
employed at Tinder.3 Rather, it says Rad, as CEO, breached his obligations backing up his Tinder
emails in August 2016 and April 2017, accessing that email in his personal accounts, and creating
copies of Tinder documents. Compl. ¶54. That is all.
All of this conduct is permitted by the Amendment Agreement. Rad has the right to use
Confidential Information in a broad range of circumstances, including “in connection with his
duties as an employee of Tinder,” in consultation with “any financial, legal, tax or accounting
advisor,” or in connection with a Qualifying Valuation Process. Ex. B §2. Rad’s rights to use
Confidential Information throughout his employment at Tinder necessarily include the right to
“direct physical possession” of that information. See Silvaco Data Sys. v. Intel Corp., 184 Cal.
App. 4th 210, 223 (2010); USE, Black’s Law Dictionary (10th ed. 2014) (“long-continued
possession and employment of a thing for the purpose for which it is adapted”). Rad’s use rights
would be meaningless if he could not possess the very information he is entitled to use. Rad’s
backing up Confidential Information during his employment was permitted under the Amendment
Agreement.
2. Rad’s Broad Rights To Possess And Use Confidential Information Continued After He Left Tinder.
Match also asserts Rad breached his Agreements by retaining the backups he had made
after he left Tinder in 2017. Compl. ¶¶62-63. Match does not allege any actual harm from Rad’s
3 To be clear, Rad is not asserting any fact-based defenses relating to how he actually used or disclosed the documents, or his intentions in doing so. Rather, Match’s claims are foreclosed as a matter of law because Match fails to plead any conduct not expressly authorized by Rad’s contractual rights.
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retention of Tinder documents. Nor does it allege he used them to start a competing venture or for
any other competitive purpose. Match only objects to Rad’s retention of his backups.
But here too, the Amendment Agreement authorizes Rad to retain Tinder Confidential
Information. For example, Rad is permitted to share Confidential Information with “any financial,
legal, tax or accounting advisor,” at any time and for any reason. Ex. B §2. Rad is also permitted
to use and share Confidential Information “in connection” with any dispute with Tinder—a
situation most likely to arise after Rad had already left the company, but which was not in any way
limited in his Agreement to disputes arising during his tenure at Tinder—and with any Qualifying
Valuation Process, no matter when it occurred. Id.4
The 2014 Options Agreement further confirms the inescapable conclusion that Rad was
permitted to retain Tinder information after he left. The Amendment Agreement authorizes Rad
to “use [Confidential Information] in connection with any Qualifying Valuation Process,” Ex. B
§2, and the 2014 Options Agreement authorized Rad to participate in that Process after his
departure from Tinder (in 2018, 2020 and 2021). E.g., Ex. C §§2, 10. In sum, the Amendment
Agreement gives Rad the right to possess and use Confidential Information in numerous situations
that would necessarily arise after he left Tinder.
4 Only one right in the Amendment Agreement has any implied time limitation: Rad’s right to use or disclose information in connection with his duties as a Tinder employee. Under the “expressio unius” canon of interpretation, this sole exception confirms the parties’ intent that all of Rad’s other rights apply both during and after Rad’s time at Tinder. See Quadrant Structured Prods. Co. v. Vertin, 23 N.Y.3d 549, 560 (2014). A contrary reading makes no sense: if Rad were required to return all Confidential Information upon departure from Tinder, then his bargained-for rights would be meaningless, because he would be unable to exercise them “in connection” with any subsequent Qualifying Valuation Process, any lawsuit against Match, or other enumerated situations that would occur after Rad left Tinder. Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (contracts will not be read to render provisions “meaningless or illusory”).
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3. The Amendment Agreement Overrides Any Conflicting Obligations On Which Match Relies.
Because the Amendment Agreement permits Rad to back up and retain company
documents after he left Tinder and so clearly bars this suit, Match barely mentions it in the
Complaint. When it does, Match distorts the Amendment Agreement to manufacture a conflict
between Rad’s rights under the governing Amendment Agreement and his obligations under
earlier contracts. See Compl. ¶¶42-43. Match’s interpretation contradicts the plain language of
the Amendment Agreement and governing law.
a. Rad’s Rights Under the Amendment Agreement Expressly Trump His Earlier Confidentiality Obligations.
Match attempts to evade the Amendment Agreement by asserting it “did not authorize Rad
to violate company policies or copy company information to a personal computer system” or
“allow Rad to retain company information after the termination of his employment.” Compl. ¶42.
But the plain text of the Amendment Agreement states that Rad’s bargained-for rights to possess
and use Confidential Information exist “[n]otwithstanding anything to the contrary in the Tinder
Agreement or in the Hatch Agreement,” or incorporated company policies. Ex. B (emphasis
added). “[N]othing” in those agreements or policies “shall prohibit Rad’s” exercise of rights under
the Amendment Agreement. Id. (emphasis added). This superordinating language—which
appears twice—means the rights in the Amendment Agreement override any conflicting terms.
It is hornbook law that the language “notwithstanding any other provision of this Contract”
“clearly signals the drafter’s intention that the provisions of the ‘notwithstanding’ section override
conflicting provisions of any other section” of a contract. Cisneros v. Alpine Ridge Grp., 508 U.S.
10, 18 (1993). “[A] clearer statement is difficult to imagine.” Id. (quotation marks omitted). The
“notwithstanding” phrase is classic “superordinating language,” and a “fail-safe way of ensuring
that the clause it introduces will absolutely, positively prevail.” Antonin Scalia & Brian A. Garner,
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Reading Law: The Interpretation of Legal Texts 126-27 (2012). Accordingly, Rad’s rights under
the Amendment Agreement prevail over any arguably conflicting obligations in the Hatch or
Tinder Agreements, including any generic prohibitions on copying or retaining Confidential
Information. As a matter of law, given the Amendment Agreement, Rad cannot be liable for
breaching the provisions in the other agreements or policies cited in the Complaint. See Helmerich
& Payne Int’l Drilling Co. v. Swift Energy Co., 180 S.W.3d 635, 643 (Tex. App. 2005); W. Willow-
Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2007 WL 3317551, at *10 (Del. Ch. Nov. 2,
2007).
b. Reading The Agreements Together, Match Fails To Allege A Breach.
Match’s breach theory also asks the Court to read the integrated agreements in piecemeal
fashion. Match seeks to enforce the prohibitions in the Tinder and Hatch Agreements but ignores
the bargained-for rights to possess and use company information in the Amendment Agreement.
See Compl. ¶¶18-20, 27; Ex. E §1.3; Ex. G §10. Such a myopic approach would render Rad’s
rights under the Amendment Agreement meaningless, which would be “unsupportable.” Suffolk
Cty. Water Auth. v. Vill. of Greenport, 800 N.Y.S.2d 767, 768 (2d Dep’t 2005).5 When the
Agreements are read as an integrated and commercially coherent contract, as they must be, it is
clear Match has failed to state a claim for breach.
Law and common sense dictate that the Agreements here be construed together as an
integrated whole. The Complaint alleges these Agreements are intertwined. Compl. ¶¶24, 37.
And the Agreements speak to a common subject matter, even explicitly cross-referencing one
5 It would also violate “the longstanding rule that” as between “a general provision of a contract” and “a specific provision,” “the specific provision” controls. TBA Glob., LLC v. Fidus Partners, LLC, 15 N.Y.S.3d 769, 776 (1st Dep’t 2015).
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another. See Ex. B §2; Ex. C §2(b)(ii)(1). Such “intertwined” contracts, even when executed at
separate times, are read as one. Commander Oil Corp. v. Advance Food Serv. Equip., 991 F.2d
49, 53 (2d Cir. 1993); Schron v. Troutman Sanders LLP, 945 N.Y.S.2d 25, 28 (1st Dep’t 2012);
SM Energy Co. v. Sutton, 376 S.W.3d 787, 790 (Tex. App. 2012).
Reading the Agreements together, Match cannot state a claim for breach because it does
not even allege Rad breached the Amendment Agreement by engaging in impermissible “use” or
“disclosure.” Ex. B §2. Match has not even attempted to do so. Instead, Match alleges Rad
breached others agreements—the Tinder and Hatch Agreements—by backing up documents and
keeping them after he left Tinder—allegations that do not even involve use or disclosure. Match
also complains Rad relied on Tinder documents in the Rad Action, but of course, the Amendment
Agreement expressly permits him to do so—which is why Match does not even assert it as a breach
here. It is Match’s burden to plead how Rad breached the Agreements, but it ignores the
Amendment Agreement and fails to allege Rad breached it.6 This is the end of Match’s breach
case.
* * * * *
6 To the extent Match argues that the Agreements be read separately and Rad had the right only to possess Confidential Information if he planned to use it for certain purposes, that reading is foreclosed by reading the Agreements as an integrated whole, and would also open the door to irrelevant discovery about Rad’s state of mind when he copied and retained company documents. Rad’s motive is irrelevant. Allowing a “conclusory” allegation about Rad’s subjective motives to proceed would be sanctioning “a fishing expedition.” Alarmex Holdings, LLC v. JP Morgan Chase Bank, N.A., 48 N.Y.S.3d 19, 20 (1st Dep’t 2017); see also Godfrey, 13 N.Y.3d at 373. What matters is whether Rad’s possession of Confidential Information—as Tinder’s CEO and thereafter—was permitted under the Agreements. It was. The conclusory allegation Rad acted “for personal gain,” Compl. ¶1, also fails because it is “vague, speculative and unsupported by any facts.” Jones v. Voskresenskaya, 5 N.Y.S.3d 16, 18 (1st Dep’t 2015). So, too, must Match’s conclusory claim that Rad “risked the safety” of Confidential Information. Compl. ¶64. Match does not even have standing on such a claim because it fails to allege any non-speculative injury arising from that risk. Soc’y of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 772-73 (1991).
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Because Match fails to plead Rad engaged in any conduct not expressly permitted by
contract, its breach of contract claim must fail. The Court need not proceed further. See CPLR
3211(a)(1); Sky Top Farms, Inc. v. Bilinski Sausage Mfg. Co., 904 N.Y.S.2d 2, 2 (1st Dep’t 2010)
(dismissing breach of contract action under CPLR 3211(a)(1) where contract expressly permitted
conduct constituting alleged breach).
B. Match Has Not Adequately Pleaded Damages.
Match’s theory of damages rests entirely on the counterfactual premise that “had [it] been
aware of Rad’s violations, [it] would have terminated him for cause.” Compl. ¶4. This
hypothetical termination “would have caused [Rad] to forfeit substantial options” and “cash out of
Tinder in a mandatory put” earlier than he ultimately did, id. ¶65, allegedly saving Match “not less
than $250 million” in Tinder stock options Rad earned, id. ¶5. These are the only damages pleaded.
Even accepting these implausible allegations as true, Match fails to plead cognizable
damages and, thus, a breach of contract claim, for at least four reasons. First, because the
governing contracts do not contain a claw-back or liquidated damages provision, Match’s damages
are not foreseeable and cannot be recovered. Second, the Complaint fails to plead the allegations
necessary to find Match could have even theoretically terminated Rad for “Cause.” Third, the
damages alleged are impermissibly vague and speculative. Fourth, the Complaint fails to allege
any damages arising from Rad’s conduct after he left Tinder. The contract claim must be
dismissed. Scentsational Techs., LLC v. Pepsico, Inc., 2018 WL 2465370, at *10 (S.D.N.Y.
May 23, 2018).
1. The Complaint Seeks An Impermissible Windfall, Not Legally Cognizable Breach-Of-Contract Damages.
Match is trying to reverse-engineer a basis to claw back Rad’s equity, even though none of
the Agreements contains a claw-back for confidentiality violations. This is impermissible.
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Match must plead damages that “actually follow…from the [alleged] breach of the
contract,” Nat’l Mkt. Share, Inc. v. Sterling Nat’l Bank , 392 F.3d 520, 525-26 (2d Cir. 2004), and
were “foreseeable” at the time of contracting, Freund v. Washington Square Press, Inc., 34 N.Y.2d
379, 382 (1974); see also Kenford Co. v. Cty. of Erie, 67 N.Y.2d 257, 261 (1986). (damages must
have been “fairly within the contemplation of the parties to the contract at the time it was made”).
This means Match is limited to damages attributable to the foreseeable harms directly caused by
Rad’s alleged backing-up and retention of Tinder documents—no more. There is not a single
allegation that Match has suffered any actual damages from Rad’s backing up and retention of
company information, let alone the types of competitive injury typically alleged in a confidentiality
case. See Nat’l Mkt. Share, Inc., 392 F.3d at 525-26. Further, unlike many contracts, the
Agreements do not contain applicable claw-back or liquidated damages provisions, making the
“damages” Match seeks to impose here particularly unforeseeable and improper. Freund, 34
N.Y.2d at 382.
The law is also clear “the injured party should not recover more from the breach than he
would have gained had the contract been fully performed.” Id. In other words, “[d]amages in a
contract action should leave the injured person in as good a position as full performance, ...not
provide a windfall.” Gosden v. Elmira City Sch. Dist., 934 N.Y.S.2d 256, 258 (3d Dep’t 2011)
(emphasis added). But if Rad had never copied or retained documents, Match would not be $250
million richer today. Allowing them to claw back $250 million Rad rightfully earned would give
Match an unlawful windfall.
Because Match has failed to plead the damages sought “actually follow or may follow from
the [alleged] breach of the contract,” its claim must be dismissed. Nat’l Mkt. Share, Inc., 392 F.3d
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at 525; see also RXR WWP Owner LLC v. WWP Sponsor, LLC, 43 N.Y.S.3d 298, 299 (1st Dep’t
2016).
2. The Complaint Does Not Allege Match Could Have Fired Rad For “Cause.”
The Complaint asserts in conclusory fashion that Match would have terminated Rad for
“Cause” upon learning he backed up his own Tinder email account in or about August 2016, but
fails to plead Match could have done so, even theoretically. The Agreements contain multiple
notice-and-cure provisions—which the Complaint fails to mention—that protected Rad from being
arbitrarily fired for “Cause.” Under his Hatch and Tinder Employment Agreements, Rad was
entitled to “written notice” of any alleged material breach and “a period of thirty (30) days after...in
which to cure” before he could be terminated for “Cause.” Ex. D §7; see also Ex. F §8. His 2014
Options Agreement similarly guaranteed him a 10-day cure period. Ex. C §(2)(b)(ii)(1). Match
was obligated to follow these provisions, but has not pleaded Rad was given notice of his purported
breaches, much less an opportunity to cure. U.S. Bank Nat’l Ass’n v. GreenPoint Mortg. Funding,
Inc., 45 N.Y.S.3d 11, 17 (1st Dep’t 2016) (“Where…a contract specifies a cure period, any claim
premised on the failure to effect a cure is premature if it is brought before the expiration of the
cure period.”).
Accordingly, Match has failed to plead it could have terminated Rad for “Cause.”7 Bakal
v. U.S. Bank Nat’l Ass’n, 747 F. App’x 32, 35-36 (2d Cir. 2019) (dismissing contract claim for
failure to allege “notice was given” or breach went uncured); see Keysight Techs., Inc. v. Mentor
7 Match’s theory also assumes Rad’s alleged backing up and retention of company emails— without more—rose to the level of a “material breach” warranting termination for “Cause.” It does not. In fact, the 2014 Options Agreement acknowledges that certain disclosures, namely, “disclosures made in connection with [Rad’s] duties as a Service Provider,” are not even a breach at all, let alone a material breach. Ex. C §2(b)(ii)(1).
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Graphics Corp., 2017 WL 7310781, at *7 (N.D. Cal. Sept. 28, 2017); Cornell Glasgow, LLC v.
LaGrange Properties, LLC, 2012 WL 6840625, at *1 (Del. Super. Ct. Dec. 7, 2012). At most,
Match has pleaded it could have terminated Rad without “Cause,” which dooms its damages claim
as a matter of law.8
3. Match’s Damages Are Impermissibly Speculative.
Match’s “damages” are sheer speculation and thus the “complaint...[is] properly
dismissed” at the pleading stage. Lloyd v. Town of Wheatfield, 67 N.Y.2d 809, 810 (1986)
(complaint dismissed because damages claim is “too speculative”).
Match’s damages theory is based on the assumption that, upon learning Rad copied his
own email in August 2016, while he was Tinder’s CEO, Match would have (1) immediately
determined Rad had committed a “material breach” warranting termination for “Cause”; (2)
provided Rad with formal notice and an opportunity to cure; and (3) Rad would have refused to
cure, knowingly sacrificing hundreds of millions of dollars. As discussed above, supra §I(B)(2),
Match has not even pleaded these allegations. More broadly, every aspect of Match’s damages
theory rests on a preposterous set of counterfactual allegations that defy common sense.
To begin, Match’s allegation it would have fired Rad—the Founder and CEO of Tinder—
for “Cause” upon learning he backed up his work email is absurd on its face. Conspicuously absent
from the Complaint is any allegation that Match has ever even disciplined any employee for
allegedly breaching his confidentiality obligations—much less terminated a founding executive
8 If Rad had been terminated without “Cause,” Match could not have forced Rad to exercise his options immediately in an earlier discretionary Put. Rad would have been entitled to further vesting for at least six months and to participate in at least the May 2017 Scheduled Put—which is exactly what happened. Ex. C §§2(b), 10(c). In that scenario, Rad would have received no less than what occurred in reality, and Match suffered no damages.
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and stripped him of his equity.9 Cf. O’Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756,
759 (9th Cir. 1996) (explaining after-acquired evidence inquiry “focuses on the employer’s actual
employment practices, not just the standards established in its employee manuals, and reflects a
recognition that employers often say they will discharge employees for certain misconduct while
in practice they do not.”). This is precisely the type of “inherently incredible” allegation the Court
should reject on the pleadings. Skillgames, 767 N.Y.S.2d at 421.
Match assumes not only what it would have done in the alternative universe of the
Complaint, but what Rad would have done. Match asks this Court to believe that Rad, properly
given notice and the opportunity to cure his alleged breach, would have refused and sacrificed a
quarter-billion dollars in equity in the company he built so he could keep some company
documents. This unsupported fantasy rests on “[s]peculative” assumptions “about what might
have happened” that are “not sufficient to support the plaintiff’s allegations” of damages. Citidress
II Corp. v. Tokayer, 962 N.Y.S. 2d 691, 692 (2d Dep’t 2013); see Zamora v. Morphix Co., 2018
WL 1033228, at *8 (S.D.N.Y. Feb. 21, 2018) (rejecting speculation as to what another party
“would have done,” because “[m]ere conjecture, surmise or speculation is not enough to sustain a
claim for damages.” (quotations omitted)).
Because Match’s damages “theory is too speculative to go forward” and “the very fact of
damages is merely hypothetical,” Match’s contract claim must be dismissed. Atlantis Info. Tech.,
GmbH v. CA, Inc., 2011 WL 4543252, at *10 (E.D.N.Y. Sept. 28, 2011) (dismissing because
“breach of contract damages [were] premised on the curative steps [plaintiff] claim[ed] it would
have taken” had it been aware of defendant’s actions); see also TSL (USA) Inc. v.
9 Rad is confident discovery will show Match was in fact aware of Rad’s actions and that Match’s claims are barred by waiver, laches, and estoppel, among other defenses.
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OppenheimerFunds, Inc., 977 N.Y.S.2d 638, 638 (1st Dep’t 2014); Kantor v. 75 Worth Street,
LLC, 945 N.Y.S.2d 245, 245-46 (1st Dep’t 2012).
4. Match Fails To Allege Damages From Rad’s Retention Of Confidential Information.
The Complaint asserts “Rad violated his obligations to his employers by retaining”
Confidential Information “after his employment was terminated” in September 2017. Compl. ¶1.
As a result of this alleged breach, Match now seeks “the value Rad improperly realized from Tinder
options.” Id. ¶67. That makes no sense.
Match’s entire damages theory is that had it known of Rad’s alleged confidentiality
violations during his tenure, it would have fired him earlier than it did. Id. ¶60. You cannot fire
someone for breaching a provision—such as the post-employment retention provision—that by its
very terms cannot be breached until after that person has left your employ. See Ex. E §4; Ex. G
§10. This theory is nonsense and “[w]ithout resulting damages, a claim for breach of contract
cannot stand.” JFK Hotel Owner, LLC v. Hilton Hotels Corp., 986 N.Y.S.2d 866 (Sup. Ct. 2014).
Because Match fails to plead any damages arising from Rad’s actions after he left Tinder,
* * * * *
Match’s breach of contract claim fails as a matter of law for each of the above reasons, and
a litany of others.10 The Court should dismiss the claim outright.
10 First, Rad’s counsel have asked Match to identify any additional contracts or policies it believes governed Rad’s conduct at relevant times. Having identified none, Match fails to state a claim under any contract, policy, or procedure not specifically cited in the Complaint. Gordon & Breach Sci. Publishers, Inc. v. N.Y. Sys. Exch., Inc., 699 N.Y.S.2d 673 (1st Dep’t 1999) (dismissing for failure “to identify the contractual provisions…breached”). Second, Match has not pleaded Rad copied or retained any Hatch Confidential Information, despite asserting he violated the Hatch Agreement. See Compl. ¶¶54, 62. Third, company email policies on which Match relies fail to overcome Rad’s 2014 Options Agreement, as all amendments to that agreement must be in writing
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II. The Unjust Enrichment Claim Must Be Dismissed.
Match “alternative[ly]” asserts that “Rad has been unjustly enriched by hiding his repeated
and deliberate violations of confidentiality agreements and company policies.” Compl. ¶69. This
kitchen-sink claim fails.
First, “[t]he existence of a valid and enforceable written contract governing a particular
subject matter…precludes” a claim of unjust enrichment “for events arising out of the same subject
matter.” Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 388-89 (1987). Neither
party here “challenges the validity of the[] contracts” governing their relationship, Digizip.com,
Inc. v. Verizon Servs. Corp., 139 F. Supp. 3d 670, 683 (S.D.N.Y. 2015), nor that they “fully detail[]
all applicable terms and conditions,” Clark-Fitzpatrick, 70 N.Y.2d at 389.11 Thus, “[t]he unjust
enrichment claim[] must be dismissed.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield
of N.J., Inc., 448 F.3d 573, 586 (2d Cir. 2006).12
Second, Match fails to plead that “it is against equity and good conscience to permit [the
other party] to retain what is sought to be recovered,” i.e., compensation Rad earned over several
years as Tinder’s Founder and CEO. Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 182
(2011) (quotation omitted). An employer cannot claim an employee has been “unjustly enriched”
by the parties. Ex. C §§10(f), 13. Fourth, any claim of breach of either the Hatch Agreement occurring before January 15, 2013, ACE Sec. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581, 594 (2015), or the Tinder Agreements before January 15, 2015, Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314-15 (Tex. 2006), is time-barred.
11 In the Rad Action, Rad and his co-plaintiffs agree their unjust enrichment claim may be dismissed if Match concedes that action is governed by the contracts at issue. Rad et al. v. IAC/InterActiveCorp et al., No. 654038/2018, Dkt. No. 63 at 28 (Dec. 17, 2018).
12 Any claim of unjust enrichment regarding the Hatch Agreements prior to January 15, 2013, Cohen v. S.A.C. Trading Corp., 711 F.3d 353, 364 (2d Cir. 2013), or the Tinder Agreements before January 15, 2017, Elledge v. Friberg-Cooper Water Supply Corp., 240 S.W.3d 869, 871 (Tex. 2007), is time-barred.
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if the employee “was paid in consideration for [his] work”—“even if” the employer claims it
“could (and actually would) have fired” the employee for some behavior had the employer known
of it. United States v. Cancer Treatment Ctrs. of Am., 350 F. Supp. 2d 765, 773 (N.D. Ill. 2004)
(emphasis added). It is not inequitable for an executive to retain compensation he earned. See,
e.g., In re Pfizer Inc. S’holder Derivative Litig., 722 F. Supp. 2d 453, 465-66 (S.D.N.Y. 2010);
Grika ex rel. McGraw, 76 N.Y.S.3d 546, 549 (1st Dep’t 2018); Cent. Laborers’ Pension Fund v.
Dimon, 2014 WL 3639185, at *5 (S.D.N.Y. July 23, 2014). Yet Match’s purported “damages”
consist entirely of “compensation” Rad rightfully earned for services rendered. Compl. ¶¶4-5, 33,
40. The theory fails as pleaded.
CONCLUSION
For the foregoing reasons, the Court should dismiss the Complaint.
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GIBSON, DUNN & CRUTCHER LLP
By: /s/ Orin Snyder
Attorneys for Sean Rad
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ATTORNEY CERTIFICATION PURSUANT TO COMMERCIAL DIVISION RULE 17
I, Orin Snyder, an attorney duly admitted to practice law before the courts of the State of
New York, hereby certify that this Memorandum of Law in Support of Defendant Sean Rad’s
Motion to Dismiss complies with the word count limit set forth in Rule 17 of the Commercial
Division of the Supreme Court (22 NYCRR 202.70(g)) because it contains 6,999 words, excluding
the parts of the memorandum exempted by Rule 17. In preparing this certification, I have relied
on the word count of the word-processing system used to prepare this memorandum of law.
Dated: March 25, 2019
New York, New York
/s/ Orin Snyder . Orin Snyder
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I. Rad Creates Tinder And Becomes Tinder's CEO.
II. In 2014, Rad Negotiates Agreements Guaranteeing Him Long-Term Equity In Tinder.
III. Rad Signs The Amendment Agreement, Granting Him Broad And Continuing Rights To Possess And Use Confidential Information.
IV. Rad Sues, Prompting Match To File This Retaliatory Action.
LEGAL STANDARD
A. The Amendment Agreement Forecloses Match's Contract Claim.
1. Rad Had Broad Rights To Possess And Use Confidential Information During His Employment As Tinder CEO.
2. Rad's Broad Rights To Possess And Use Confidential Information Continued After He Left Tinder.
3. The Amendment Agreement Overrides Any Conflicting Obligations On Which Match Relies.
a. Rad's Rights Under the Amendment Agreement Expressly Trump His Earlier Confidentiality Obligations.
b. Reading The Agreements Together, Match Fails To Allege A Breach.
B. Match Has Not Adequately Pleaded Damages.
1. The Complaint Seeks An Impermissible Windfall, Not Legally Cognizable Breach-Of-Contract Damages.
2. The Complaint Does Not Allege Match Could Have Fired Rad For "Cause."
3. Match's Damages Are Impermissibly Speculative.
4. Match Fails To Allege Damages From Rad's Retention Of Confidential Information.
II. The Unjust Enrichment Claim Must Be Dismissed.
CONCLUSION

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