Blatt v. Pambakian

• Decision Date: 09 January 2020
• Docket Number: Case No. CV 19-7046-MWF (FFMx)
• Citation: 432 F.Supp.3d 1141
• Parties: Gregory BLATT v. Rosette PAMBAKIAN et al.
• Court: U.S. District Court — Central District of California

432 F.Supp.3d 1141

Gregory BLATT

v.Rosette PAMBAKIAN et al.

Case No. CV 19-7046-MWF (FFMx)

United States District Court, C.D. California.

Filed January 9, 2020

Davida P. Brook, Lora Jasmina Krsulich, Susman Godfrey LLP, Los Angeles, CA, Vineet Bhatia, Pro Hac Vice; Susman Godfrey LLP, Houston, TX, for Gregory Blatt.

Deborah L. Stein, Gibson Dunn and Crutcher LLP, Los Angeles, CA, Orin S. Snyder, Pro Hac Vice; Gibson Dunn and Crutcher LLP, New York, NY, for Rosette Pambakian et al.

ORDER RE: PLAINTIFF'S MOTION TO COMPEL ARBITRATION [19]; DEFENDANTS' MOTION TO STRIKE AMENDED COMPLAINT [20]

The Honorable MICHAEL W. FITZGERALD, U.S. District Judge

Before the Court are two motions:

First, there is Plaintiff Gregory Blatt's Motion to Compel Arbitration and Stay Litigation (the "Arbitration Motion"), filed on October 7, 2019. (Docket No. 19). On October 15, 2019, Defendant Rosette Pambakian filed an Opposition. (Docket No. 26). On October 21, 2019, Plaintiff filed a Reply. (Docket No. 27).

Second, there is Defendants Rosette Pambakian and Sean Rad's Special Motion to Strike Plaintiff's First Amended Complaint (Pursuant to Cal. Code Civ. Proc. § 425.16 ) (the "Anti-SLAPP Motion"), filed on October 7, 2019. (Docket No. 20). On October 15, 2019, Plaintiff filed an Opposition. (Docket No. 23). On October 21, 2019, Defendants filed a Reply. (Docket No. 29).

The Court has read and considered the papers filed in connection with the motions, and held a hearing on November 4, 2019.

For the reasons discussed below, the two motions are ruled upon as follows:

• The Arbitration Motion is GRANTED . Although Blatt is not a signatory to the ADR Agreement, he is a third party beneficiary who is entitled to enforce the agreement. Blatt's claims also fall within the scope of the arbitration agreement, and the ADR Agreement is enforceable. Therefore, the action against Pambakian is stayed.

• The Anti-SLAPP Motion is DENIED as moot as to Defendant Pambakian. It is GRANTED in part and DENIED in part as to Defendant Rad. Although Rad has established that the allegedly defamatory statements were made in connection with issues under consideration or review by a judicial body, he has failed to demonstrate that all of the allegedly defamatory statements fall under the fair and true reporting privilege.

I. BACKGROUND

Plaintiff commenced this action on August 13, 2019. (See Complaint (Docket No. 1)). On October 3, 2019, Plaintiff filed a First Amended Complaint ("FAC"). (Docket No. 18).

A. Plaintiff's Claims

The FAC contains the following allegations:

This is an action for defamation and defamation per se. (FAC ¶ 1). In order to extract $2 billion from IAC/InterActiveCorp ("IAC") and Match Group, Inc. ("Match"), Defendants Pambakian and Rad have conspired to make false allegations of sexual harassment and sexual assault against Blatt. (Id. ). Blatt brings this action to obtain redress for false accusations that have been leveled against him. (Id. ).

Pambakian and Rad are former executives at Tinder, Inc. ("Tinder"). (Id. ¶ 2). Tinder is wholly owned and operated by Match, and Match is a controlled subsidiary of IAC. (Id. ). Blatt was the CEO and Chairman of Match Group and the CEO and Executive Chairman of Tinder at various times until December 2017, when he left the company. (Id. ¶¶ 20, 65).

Beginning in July 2015, Blatt worked closely with Pambakian, even though she did not report to Blatt. (Id. ¶ 33). During the time they worked together, Blatt and Pambakian developed a productive professional relationship and a close friendship. (Id. ).

1. The 2016 Tinder Holiday Party

On the evening of December 9, 2016, Blatt attended the Tinder holiday party. (Id. ¶ 34). During the party, Blatt and Pambakian started talking and the conversation turned flirtatious. (Id. ). Neither of them indicated at any time that they took offense at the other's comments. (Id. ). At some point afterward, Pambakian suggested to Blatt that when the party was over, they find a hotel room to host an after-party. (Id. ). Later, unable to find any restaurants open in the hotel, Blatt suggested broadly to the people he was with, including Pambakian, that they "get out of there" to find food. (Id. ¶ 35). Blatt did not go straight up to the room with others, but instead spoke to some other Tinder employees who had not yet left the party. (Id. ¶ 36).

Blatt eventually texted one of the Tinder employees for the room number and came up to the hotel room. (Id. ¶ 37). Pambakian and two other Tinder employees were there. (Id. ). Blatt and Pambakian kissed; the interaction was consensual. (Id. ). Room service was then delivered. (Id. ). Soon after eating, Blatt departed. (Id. ). While in the hotel room, Blatt and Pambakian were fully clothed at all times. (Id. ). After that evening, Pambakian and Blatt never engaged in any further physical encounters. (Id. ).

On Monday morning, Blatt apologized to Pambakian for the night of the holiday party, saying he had used poor judgment and, given their working relationship, he had let things go too far. (Id. ¶ 38). Pambakian responded, "Please. I'm sorry too. It was as much me as it was you." (Id. ). They agreed that they did not want anything to interfere with their good relationship, and Pambakian suggested to Blatt that they would not tell anyone Blatt had gone up to the room. (Id. ). Blatt agreed. (Id. ). He also apologized to the other two employees who had been in the hotel room for what had happened. (Id. ). Work went on as usual for Blatt and Pambakian and their good working relationship continued. (Id. ¶ 39).

2. Rad's Allegations Against Blatt

Blatt had been Rad's boss, directly and indirectly, through Rad's tenure at Tinder. (Id. ¶ 3). Over that time, Rad came to blame Blatt for a variety of perceived transgressions, including Rad's failure to obtain control of Tinder soon after its launch in 2012, Rad's demotion, and his ultimate dismissal from Tinder's management in 2016. (Id. ). But it was the valuation negotiations between Blatt and Rad in April 2017 that pushed Rad over the edge. (Id. ¶ 4).

The first valuation of Tinder was scheduled for May 2017. (Id. ¶ 44). Under the contractually agreed appraisal process, two investment banks were to value the Tinder stock options. (Id. ¶ 4). Hoping to avoid the process altogether, Rad and Blatt began negotiating in March to see if they could agree on a value. (Id. ). However, Rad and Blatt had different perspectives regarding how Tinder should be valued. (Id. ¶ 5). As discussions began to fall apart, Rad concluded that Blatt's further participation in the valuation process would lead to a significant lower payout to Rad. (Id. ). Accordingly, on April 18, 2017, Rad confirmed that he planned to seek retribution against Blatt as a means of advancing his valuation objectives. (Id. ¶ 47).

On April 27, 2017, just two days after negotiations with Blatt over the value of Tinder broke down, Rad made a false accusation that Blatt had sexually harassed Pambakian at a Tinder holiday party some five months earlier. (Id. ¶ 5). As confirmed by multiple Tinder employees, including Pambakian, Rad made the complaint to obtain Blatt's dismissal or suspension from his position as Tinder's CEO in order to seek retribution against Blatt and secure a significant higher valuation of Rad's options. (Id. ). At the same time, Rad also reached out to a law firm to begin drafting a complaint for the lawsuit against IAC and Match that would follow the appraisal regardless of the outcome. (Id. ¶¶ 6, 47).

Rad's sexual harassment complaint against Blatt was thoroughly investigated by in-house counsel and two outside law firms. (Id. ¶¶ 7, 58). Blatt cooperated fully with the investigation, conveying his account of the relevant events, acknowledging his poor judgment that evening, and expressing genuine regret at what had occurred. (Id. ¶ 58). When the investigation concluded, the Board determined that Blatt had not committed sexual harassment or violated any other company policy or law. (Id. ). The Board did, however, agree with Blatt that he had exercised poor judgment, and as a result, determined to cancel an option grant Blatt had been scheduled to receive in early May. (Id. ).

3. The Valuation Lawsuit and Pambakian Lawsuit

The appraisal process relating to Tinder's options was completed in mid-July 2017, and Tinder was valued at approximately $3 billion. (Id. ¶ 60). In August 2017, Rad elected to sell all his options related to Tinder. (Id. ¶ 61). Pambakian similarly elected to sell her stock options, pocketing nearly $5 million. (Id. ¶ 8). The value of Tinder subsequently increased and Rad became furious. (Id. ).

On August 14, 2018, Rad filed a lawsuit in New York (the "Valuation Lawsuit") claiming that IAC and Match, in large part through the actions of Blatt, failed to properly value their Tinder stock options. (Id. ¶¶ 2, 14). Specifically, the plaintiffs in the Valuation Lawsuit claim that they would be entitled to an additional $2 billion if their Tinder options were properly valued. (Id. ¶ 2). Blatt is expected to be a key witness for IAC and Match in the Valuation Lawsuit. (Id. ). Damaging Blatt's credibility and tarnishing his character are important elements of Pambakian's and Rad's litigation strategy in that action. (Id. ).

Pambakian is one of the plaintiffs in the Valuation Lawsuit. (Id. ¶ 2). To recruit Pambakian for his scheme to sue Match and IAC, Rad promised millions to Pambakian in an exchange for joining the Valuation Lawsuit and making false allegations of sexual harassment against Blatt in the guise of a litigation funding agreement. (Id. ¶ 12). Securing Pambakian's false allegations was the driving motive behind these payment arrangements. (Id. ).

In the Valuation Lawsuit, Rad leveled the same allegations of sexual harassment against Blatt that he had made a year before. (Id. ). Rad and Pambakian then embarked on a coordinated media campaign to ensure that their false charges against Blatt were widely-disseminated to the public,...