Lim v. Radish Media, Inc.

Background

Jun Young Lim sued Radish Media, Inc. and Seung-Yoon Lee, alleging that he was promised an equity interest based on his employment with the company and its predecessor, Byline Media. Lim alleged that an email exchange in January 2015 established basic employment terms, including a salary and a 1.2% equity interest. He later alleged that, after taking on additional responsibilities, defendants promised him a 1.5% equity stake and repeatedly assured him that the equity would be formalized.

Lim left Radish Media in June 2016 without signing an offer letter. The letter described an equity grant but stated that the grant required approval by the company’s board of directors and that the purchase of shares would be governed by a stock option agreement. Lim alleged that Lee continued to acknowledge his equity interest after his departure. He also alleged that Radish Media implemented an employee stock plan in 2017 and that other employees received promised equity grants.

After earlier proceedings, Lim filed a second amended complaint asserting only promissory estoppel. Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not plead enough facts to state a legally sufficient claim.

Promissory Estoppel

Under the law discussed by the court, promissory estoppel requires a clear and unambiguous promise, reasonable and foreseeable reliance, and injury caused by that reliance. Because the alleged contract was subject to the statute of frauds, the court also applied a heightened requirement that Lim show an “unconscionable” injury.

The court held that Lim had not adequately pleaded a clear and unambiguous promise. The complaint did not establish that the 2017 stock plan extended to Lim, who was no longer employed by Radish Media when the plan was created. The complaint also did not allege that the offer letter’s other conditions—board approval and completion of a stock option agreement—were satisfied.

The court further held that, even if the allegations about other employees established a clear promise, Lim had not adequately pleaded reasonable and foreseeable reliance. The court reasoned that Lim knew the equity plan did not yet exist and that other people’s approval or participation would be involved. His decisions to leave his prior job, accept additional duties, reject other opportunities, and wait for the equity therefore were not sufficiently shown to be reasonable reliance on a definite promise.

The court stated that it did not need to reach the heightened injury issue because multiple other elements were missing. It nevertheless concluded that Lim’s alleged monetary loss—the value he claimed he would have received if defendants had honored the promise—would not meet the required unconscionable-injury standard under New York law.

Leave to Amend and Disposition

Lim requested permission to file a third amended complaint adding information about his residence and Lee’s membership on Radish Media’s board. The court denied that request because the proposed additions would not address the unfulfilled conditions, the lack of a clear and unambiguous promise, or the lack of reasonable reliance. The court also stated that the result would be the same under either New York or California law.

The court granted defendants’ motion to dismiss, denied leave to amend, and dismissed Lim’s promissory-estoppel claim with prejudice. It directed the clerk to terminate the motion and close the case.