EBET, Inc. v. Aspire Global International Limited et al

Filing 60

ORDER and REPORT AND RECOMMENDATION. ORDER- IT IS THEREFORE ORDERED that Plaintiff's motion to amend (ECF No. 50 ) is granted. RECOMMENDATION - IT IS THEREFORE RECOMMENDED that Defendants' motion to dismiss (ECF No. 22 ) be denied as moot. Objections to R&R due by 5/22/2024. Signed by Magistrate Judge Daniel J. Albregts on 5/8/2024. (Copies have been distributed pursuant to the NEF - DLS)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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EBET, Inc.,
Plaintiff,

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Case No. 2:23-cv-01830-GMN-DJA

v.
Aspire Global International Limited, a Malta
Corporation; AG Communications Limited, a
Malta Corporation; Aspire Global 7 Limited, a
Malta Corporation; Aspire Global PLC, a
Malta Corporation, et al.,

Order
and
Report and Recommendation

Defendants.

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This is a breach of contract and fraud action arising out of the parties’ agreement for

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Plaintiff EBET, Inc. to purchase online gaming business-to-consumer assets from Defendants

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Aspire Global International Limited; AG Communications Limited; Aspire Global 7 Limited; and

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Aspire Global PLC (the “Aspire Defendants”). Plaintiff moves to amend its complaint to add the

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parent companies of the Aspire Defendants—Neogames S.A.; Neogames Connect S.A.R.L.; and

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Neogames Connect Limited—to add factual allegations, and to add causes of action. (ECF No.

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50). Defendants oppose, arguing that the amendment would be futile because Plaintiff’s claims

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are subject to arbitration. (ECF No. 55). Because the Court finds that Defendants’ futility

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arguments are better made in a motion to dismiss, it grants Plaintiff’s motion to amend and

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recommends denying Defendants’ pending motion to dismiss Plaintiff’s original complaint as

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moot (ECF No. 22).

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I.

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Discussion.
Generally, a party may amend its pleading once “as a matter of course” within twenty-one

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days of serving it, or within twenty-one days after service of a responsive pleading or motion

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under Rule 12(b), (e), or (f). Fed. R. Civ. P. 15(a)(1). Otherwise, “a party may amend its

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pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P.

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15(a)(2). “The court should freely give leave when justice so requires.” Id. “The court considers

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five factors [under Rule 15] in assessing the propriety of leave to amend—bad faith, undue delay,

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prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously

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amended the complaint.” United States v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011).

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The nonmovant bears the burden of showing why amendment should not be granted. Senza-Gel

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Corp. v. Seiffhart, 803 F.2d 661, 666 (Fed. Cir. 1986); see also DCD Programs, Ltd. v. Leighton,

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833 F.2d 183, 187 (9th Cir. 1987) (“party opposing amendment bears the burden of showing

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prejudice”); United States for use & benefit of Source Helicopters, Div. of Rogers Helicopters,

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Inc. v. Sayers Constr., LLC, No. 2:19-v-1602-JCM-EJY, 2020 WL 3643431, at *1 (D. Nev. July

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6, 2020) (“The party opposing amendment holds the burden to demonstrate futility.”); Akinola v.

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Severns, No. 3:14-CV-00222-HDM, 2015 WL 456535, at *2 (D. Nev. Feb. 2, 2015) (“party

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opposing the amendment carries the burden of showing why leave to amend should not be

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granted.”).

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An amendment is futile only if no set of facts can be proved under the amendment that

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would constitute a valid claim or defense. Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th

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Cir. 1988). “Denial of leave to amend on [futility grounds] is rare. Ordinarily, courts will defer

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consideration of challenges to the merits of a proposed amended pleading until after leave to

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amend is granted and the amended pleading is filed.” GMAC Mortgage LLC v. Nevada

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Association Services, Inc., No. 2:13-cv-01157-GMN-NJK, 2018 WL 487101, at *2 (D. Nev. Jan.

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5, 2018) (internal citations and quotations omitted). “Deferring ruling on the sufficiency of the

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allegations is preferred in light of the more liberal standards applicable to motions to amend and

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the fact that the parties’ arguments are better developed through a motion to dismiss or a motion

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for summary judgment.” Id. (internal citations omitted).

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Here, considering the liberal standards for allowing leave to amend and the fact that

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Defendants carry the burden of showing why amendment should not be granted, the Court grants

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Plaintiff’s motion to amend. Defendants’ only arguments against Plaintiff’s amendment concern

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futility. However, denial of leave to amend on futility grounds is rare and it is not clear that no

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set of facts can be proved under Plaintiff’s amendment that would constitute a valid claim.
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Defendants’ arguments about arbitrability are thus better developed through a motion to dismiss

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and the Court grants Plaintiff’s motion to amend. Because the Court grants Plaintiff’s motion to

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amend, it recommends denying Defendants’ pending motion to dismiss Plaintiff’s original

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complaint as moot.

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ORDER

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IT IS THEREFORE ORDERED that Plaintiff’s motion to amend (ECF No. 50) is

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granted. Plaintiff must file and serve the amended pleading as required by Local Rule 15-1(b).

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RECOMMENDATION

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IT IS THEREFORE RECOMMENDED that Defendants’ motion to dismiss (ECF No.
22) be denied as moot.

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NOTICE

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Pursuant to Local Rule IB 3-2 any objection to this Report and Recommendation must be

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in writing and filed with the Clerk of the Court within (14) days after service of this Notice. The

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Supreme Court has held that the courts of appeal may determine that an appeal has been waived

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due to the failure to file objections within the specified time. Thomas v. Arn, 474 U.S. 140, 142

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(1985), reh’g denied, 474 U.S. 1111 (1986). The Ninth Circuit has also held that (1) failure to file

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objections within the specified time and (2) failure to properly address and brief the objectionable
issues waives the right to appeal the District Court’s order and/or appeal factual issues from the
order of the District Court. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991); Britt v. Simi
Valley United Sch. Dist., 708 F.2d 452, 454 (9th Cir. 1983).

DATED: May 8, 2024

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DANIEL J. ALBREGTS
UNITED STATES MAGISTRATE JUDGE
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