Lawyers for Barry Diller's IAC/InterActiveGroup and Match Group unsuccessfully called for a mistrial twice on Monday in the $2 billion breach of contract case brought by the founders of Tinder.
The trial, which has not gotten past opening arguments, threatens to open up the inner workings of the media mogul's online empire, which could provide a cautionary tale to tech entrepreneurs looking for corporate seed money to grow their dreams.
Sean Rad and his co-founders, who had a 20% stake in the company, claim that Diller's handpicked team took over the romance app just before it was to be valuated and suppressed the true worth of the company to shortchange them of lucrative stock options.
In July 2017, the banks put the price of the company at about $3 billion, but the actual price could have been nearly $12 billion, said Josh Dubin, lawyer for the founders.
The techies claimed that CEO Greg Blatt withheld plans to enhance the app to include a subscription service, Tinder Gold, and expand beyond Facebook users until after the banks gave their appraisal.
"When do you think Tinder Gold was released?" Dubin asked the jury. "The day after [the valuations...because if they told the banks that they were charging extra for Tinder Gold that was going to drive the value of this company and the growth projections through the roof."
IAC lawyer Bill Carmody first asked the judge to toss the case because there had been no contractual obligation over when the new feature would be released.
"It just confuses the jury on a central issue of the case," he said. "We do move for a mistrial."
Judge Joel Cohen rejected the request.
The second attempt to throw out the case came over whether Rad's side suggested that the banks were in bed with IAC over lowballing the price of the company.
Dubin told the jury that Match CFO Gary Swidler was "buddy-buddy" with an executive at one of the banks that appraised Tinder.
"Aside from being factually wrong," said Shawn Rabin, who is also on the IAC dream team, "that's exactly the type of evidence that is given to undermine the independence of the banks. That's the exact type of evidence that this jury will never forget. I think it's grounds for a mistrial."
Rabin also objected to a suggestion that when Tinder was folded into Match Group, Rad and his team were still owed stock options promised prior to the merger.
Dubin also suggested that the only reason that Rad was bounced from Tinder and Diller's team was brought in was to swindle the group.
The judge had previously suppressed a sexual harassment claim under Rad's tenure as CEO and statements to the press that supermodels were begging him for sex.
Rabin asked the judge to allow that into evidence.
Orin Snyder, Rad's other lawyer, warned that if that is presented, a sexual harassment claim against Blatt should also be presented.
The judge denied the request to toss the trial, but promised to consider whether or not to allow evidence of the sexual shenanigans into testimony.