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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1 2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 5 6 *** EBET, Inc., Plaintiff, 7 8 9 10 11 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. 12 This is a breach of contract and fraud action arising out of the parties’ agreement for 13 14 Plaintiff EBET, Inc. to purchase online gaming business-to-consumer assets from Defendants 15 Aspire Global International Limited; AG Communications Limited; Aspire Global 7 Limited; and 16 Aspire Global PLC (the “Aspire Defendants”). Plaintiff moves to amend its complaint to add the 17 parent companies of the Aspire Defendants—Neogames S.A.; Neogames Connect S.A.R.L.; and 18 Neogames Connect Limited—to add factual allegations, and to add causes of action. (ECF No. 19 50). Defendants oppose, arguing that the amendment would be futile because Plaintiff’s claims 20 are subject to arbitration. (ECF No. 55). Because the Court finds that Defendants’ futility 21 arguments are better made in a motion to dismiss, it grants Plaintiff’s motion to amend and 22 recommends denying Defendants’ pending motion to dismiss Plaintiff’s original complaint as 23 moot (ECF No. 22). 24 I. 25 Discussion. Generally, a party may amend its pleading once “as a matter of course” within twenty-one 26 days of serving it, or within twenty-one days after service of a responsive pleading or motion 27 under Rule 12(b), (e), or (f). Fed. R. Civ. P. 15(a)(1). Otherwise, “a party may amend its 28 pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. P. 1 15(a)(2). “The court should freely give leave when justice so requires.” Id. “The court considers 2 five factors [under Rule 15] in assessing the propriety of leave to amend—bad faith, undue delay, 3 prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously 4 amended the complaint.” United States v. Corinthian Colls., 655 F.3d 984, 995 (9th Cir. 2011). 5 The nonmovant bears the burden of showing why amendment should not be granted. Senza-Gel 6 Corp. v. Seiffhart, 803 F.2d 661, 666 (Fed. Cir. 1986); see also DCD Programs, Ltd. v. Leighton, 7 833 F.2d 183, 187 (9th Cir. 1987) (“party opposing amendment bears the burden of showing 8 prejudice”); United States for use & benefit of Source Helicopters, Div. of Rogers Helicopters, 9 Inc. v. Sayers Constr., LLC, No. 2:19-v-1602-JCM-EJY, 2020 WL 3643431, at *1 (D. Nev. July 10 6, 2020) (“The party opposing amendment holds the burden to demonstrate futility.”); Akinola v. 11 Severns, No. 3:14-CV-00222-HDM, 2015 WL 456535, at *2 (D. Nev. Feb. 2, 2015) (“party 12 opposing the amendment carries the burden of showing why leave to amend should not be 13 granted.”). 14 An amendment is futile only if no set of facts can be proved under the amendment that 15 would constitute a valid claim or defense. Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th 16 Cir. 1988). “Denial of leave to amend on [futility grounds] is rare. Ordinarily, courts will defer 17 consideration of challenges to the merits of a proposed amended pleading until after leave to 18 amend is granted and the amended pleading is filed.” GMAC Mortgage LLC v. Nevada 19 Association Services, Inc., No. 2:13-cv-01157-GMN-NJK, 2018 WL 487101, at *2 (D. Nev. Jan. 20 5, 2018) (internal citations and quotations omitted). “Deferring ruling on the sufficiency of the 21 allegations is preferred in light of the more liberal standards applicable to motions to amend and 22 the fact that the parties’ arguments are better developed through a motion to dismiss or a motion 23 for summary judgment.” Id. (internal citations omitted). 24 Here, considering the liberal standards for allowing leave to amend and the fact that 25 Defendants carry the burden of showing why amendment should not be granted, the Court grants 26 Plaintiff’s motion to amend. Defendants’ only arguments against Plaintiff’s amendment concern 27 futility. However, denial of leave to amend on futility grounds is rare and it is not clear that no 28 set of facts can be proved under Plaintiff’s amendment that would constitute a valid claim. Page 2 of 3 1 Defendants’ arguments about arbitrability are thus better developed through a motion to dismiss 2 and the Court grants Plaintiff’s motion to amend. Because the Court grants Plaintiff’s motion to 3 amend, it recommends denying Defendants’ pending motion to dismiss Plaintiff’s original 4 complaint as moot. 5 6 ORDER 7 IT IS THEREFORE ORDERED that Plaintiff’s motion to amend (ECF No. 50) is 8 granted. Plaintiff must file and serve the amended pleading as required by Local Rule 15-1(b). 9 RECOMMENDATION 10 11 12 IT IS THEREFORE RECOMMENDED that Defendants’ motion to dismiss (ECF No. 22) be denied as moot. 13 NOTICE 14 15 Pursuant to Local Rule IB 3-2 any objection to this Report and Recommendation must be 16 in writing and filed with the Clerk of the Court within (14) days after service of this Notice. The 17 Supreme Court has held that the courts of appeal may determine that an appeal has been waived 18 due to the failure to file objections within the specified time. Thomas v. Arn, 474 U.S. 140, 142 19 (1985), reh’g denied, 474 U.S. 1111 (1986). The Ninth Circuit has also held that (1) failure to file 20 21 22 23 24 25 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 26 27 28 DANIEL J. ALBREGTS UNITED STATES MAGISTRATE JUDGE Page 3 of 3

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