Case 1:22-cv-23753-KMM Document 197 Entered on FLSD Docket 05/10/2023 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
`MIAMI DIVISION
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`CASE NO. 1:22-cv-23753-KMM
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`Plaintiffs,
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`EDWIN GARRISON, et al., on behalf of
`Themselves and all others similarly situated,
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`v.
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`SAM BANKMAN-FRIED, et al.,
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`Defendants.
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`_________________________________________/
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`PLAINTIFFS’ RESPONSE IN OPPOSITION TO
`DEFENDANTS’ MOTIONS TO STAY DISCOVERY
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`Plaintiffs respond in opposition to the Motion to Stay all Discovery (including even
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`exchanging “Initial Disclosures”), [ECF No. 162], filed by Defendants Brady, Bündchen, Curry,
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`David, the Golden State Warriors, LLC (“GSW”), Haslem, Lawrence, Ohtani, O’Leary, Ortiz, and
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`Osaka (collectively, the “Non-FTX Defendants”).
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`The Non-Florida Defendants (Curry, David, GSW, Ohtani, and Osaka) moved on Friday,
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`April 14, 2023, to dismiss the complaint for lack of personal jurisdiction. ECF No. 139. Relying
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`on their own newly filed Declarations of Defendants Curry, David, and Ohtani, these FTX
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`Defendants argue all claims against them must be dismissed at this stage of the case with prejudice,
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`because this Court lacks specific jurisdiction over them. Essentially, Defendants argue (via self-
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`serving, sworn statements) that: (1) there is simply no connection between any of these FTX
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`allegations against them and the state of Florida, and (2) this Court cannot, and should not,
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`allow Plaintiffs to even conduct any jurisdictional discovery to test those self-serving claims.
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`But the Defendants’ own Declarations contain general, conclusory language, such as where
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`the celebrity declarants live, where they signed their own individual contracts, and where “their
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`own” agents and employees reside. They say nothing about any actions FTX took in Florida,
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`regarding their specific FTX agreements, regarding which Plaintiffs have been seeking limited
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`discovery.
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`Although Plaintiffs will be seeking to amend the Complaint this week to, among other
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`things, include additional facts and evidence that demonstrate that Plaintiffs’ claims against all
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`five of the Non-Florida Defendants “arise out of acts committed by defendants in or directed at the
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`forum,” ECF No. 195 at 15, the Non-Florida Defendants’ continued assertions (1) that Plaintiffs’
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`jurisdictional allegations in the current Complaint do not establish at least a prima facie basis for
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`jurisdiction and (2) that the jurisdictional allegations in the current Complaint are contained only
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`within a single paragraph are incorrect and entirely without basis. In addition to paragraph 50 of
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`the Complaint—which is in substance the same as the jurisdictional allegation that Chief Judge
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`Altonaga, Judge Altman, and Magistrate Judge Reid looked to in granting the plaintiffs’ requests
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`for jurisdictional discovery in the Voyager Digital cases—Plaintiffs also allege that:
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`• The FTX Platform and FTX’s fraudulent scheme (which Defendants
`conspired to participate in) emanated from FTX’s domestic headquarters in
`Miami, Florida; ECF No. 16, ¶¶ 8, 121;
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`•
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`Integral to FTX’s fraudulent scheme “involved utilizing some of the biggest
`names in sports and entertainment to raise funds and drive global consumers
`to invest in the YBAs, which were offered and sold largely from the FTX
`Entities’ domestic base of operations here in Miami, Florida, pouring
`billions of dollars into the Deceptive FTX Platform to keep the whole
`scheme afloat,” ECF No. 16, ¶ 16;
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`• Florida Plaintiffs Podalsky, Lindeen, and Chernyavksy, all alleging that
`they purchased unregistered securities from FTX “after being exposed to
`some or all of Defendants’ misrepresentations and omissions regarding the
`Deceptive FTX Platform as detailed in this complaint, and/or executed
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`2
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`reliance on
`in
`the Deceptive FTX Platform
`trades on
`misrepresentations and omissions,” ECF No. 16, ¶¶ 24–26;
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`those
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`• Defendant Osaka debuted her partnership with the FTX Entities by wearing
`the FTX logo on the kit she wore beginning with the Miami Open in 2022,
`ECF No. 16, ¶ 227; and
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`• “Plaintiffs seek certification of the Classes in part because all offers of FTX
`YBAs to Plaintiffs and the Class Members (in which Defendants each
`substantially participated) were made by FTX from their principal place of
`business in Miami, Florida, and thus every single offer to sell an FTX YBA
`stems from a transactional occurrence that emanated from the State of
`Florida.” ECF No. 16, ¶ 235.
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`Plaintiffs here seek the same, reasonable discovery that plaintiffs sought in Undersigned
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`Counsel’s related Voyager Digital cases, based on largely the same types of allegations regarding
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`those defendants’ connections to the state of Florida as the ones Plaintiffs allege here as to the
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`Non-Florida Defendants—and Chief Judge Altonaga, Judge Altman, and Magistrate Judge Reid,
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`in various Orders based specifically on Eleventh Circuit precedent, compelled Defendants to
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`submit to jurisdictional discovery, despite the fact that defendants there raised nearly identical
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`objections to the Non-Florida Defendants here. See ECF No. 163, Comp. Ex. A. All FTX
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`Defendants continue to argue and reiterate (with no logic or reasoning) that none of these prior
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`Orders by this Court are in “in any manner” relevant to this inquiry and cannot even be
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`“considered by this Court.”
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`With respect to the issue of “jurisdictional” discovery, Plaintiffs’ position is clearly stated
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`in their pending Motion for Leave to Conduct Jurisdictional Discovery. See ECF No. 163. Namely,
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`the Non-Florida Defendants should be required to respond to the “jurisdictional requests” for
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`production, see ECF No. 163, Comp. Ex. B, which were deemed served on April 28, 2023, the
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`date of the Parties’ joint Rule 26(f)/L.R. 16.1 scheduling conference. See Fed. R. Civ. P.
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`26(d)(2)(B).
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`3
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`In the Voyager Digital litigation, defendants Voyager and Mark Cuban specifically argued
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`this same defense, namely that those crypto class cases must be dismissed for a lack of personal
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`jurisdiction, alleging they had “no connection to the state of Florida.” However, the plethora of
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`evidence obtained from the compelled discovery clearly demonstrated that not only was Florida
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`one of the “main” targets for their promotion of Voyager’s unregistered securities, but it was also
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`one of the most targeted states, and thus tens of thousands of Florida residents, in fact, suffered
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`millions in damages from defendants’ offer and sale of these unregistered securities. Here, there is
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`no dispute that FTX (unlike Voyager) conducted its activities from its U.S. headquarters based
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`here in Miami, Florida, and there can be no dispute that these Defendants’ activities (such as
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`David’s Super Bowl Commercial) were certainly not confined to some limited geographic area
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`(such as only California).
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`Plaintiffs respectfully seek leave to conduct limited jurisdictional discovery. See ECF No.
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`163. With respect to the issue of “merits” discovery, Plaintiffs take no position and leave it to the
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`Court’s discretion what discovery, if any, should be permitted pending a decision on the motions
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`to dismiss and/or any transfer ordered by the Judicial Panel on Multidistrict Litigation. While
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`Defendants claim Plaintiffs “seek to take seventeen separate depositions,” ECF No. 162 at 3–4
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`(emphasis in original), Defendants’ statement is inaccurate, as the only pending discovery requests
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`are the limited ones attached to Plaintiffs’ pending Motion, see ECF No. 163 at Comp. Ex. B.
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`Finally, although Defendants have motions to dismiss pending,1 those motions will soon
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`be rendered moot, in that Plaintiffs will be seeking to file a consolidated amended complaint,
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`1 The Non-FTX Defendants base their arguments in favor of a stay of all discovery on Chudasama
`v. Mazda Motor Corp., 123 F.3d 1353 (11th Cir. 1997), and its progeny. But Chudasama does not
`require that discovery always be stayed pending resolution of a motion to dismiss. See Ray v. Spirit
`Airlines, Inc., No. 12-61528-CIV, 2012 WL 5471793 *3 (S.D. Fla. Nov. 9, 2012) (“The Eleventh
`Circuit did not, however, prescribe ‘a broad rule that discovery should be deferred whenever there
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`4
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`pursuant to Federal Rule of Civil Procedure 15(a)(2), either through Stipulation with Defendants,
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`or through seeking leave from this Court, which has acknowledged on numerous occasions that
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`“Courts routinely allow such amendments to cure pleading deficiencies in service of the general
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`principle that “decisions on the merits are not to be avoided on the basis of ‘mere technicalities.’”
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`Castros v. Signal Fin. Co. LLC, 1:17-CV-21870-KMM, 2018 WL 1137099, at *1 (S.D. Fla. Feb.
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`4, 2018) (Moore, C.J.) (collecting cases).
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`This Court previously recognized that, “[a]lthough the Court has discretion to stay
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`discovery, see McCabe v. Foley, 233 F.R.D. 683, 685 (M.D. Fla. 2006), this District’s Local Rules
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`make clear that a stay of discovery pending the determination of a motion to dismiss is the
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`exception, rather than the rule.” Vechten v. Elenson, No. 9:12-CV-80668-RNS, 2012 WL
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`12978270, at *1 (S.D. Fla. Jul. 20, 2012); see also Cabrera v. Progressive Behavioral Science,
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`Inc., 331 F.R.D. 185, 186 (S.D. Fla. 2019) (recognizing that, while district courts have broad
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`discretion in managing their dockets, “[a] stay of discovery pending the determination of a motion
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`to dismiss, however, is the exception rather than the rule.”).
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`Moreover, “[a] request to stay discovery pending a resolution of a motion is rarely
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`appropriate unless a resolution of the motion will dispose of the entire case.” Vechten, 2012 WL
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`12978270 *1 (quoting McCabe, 233 F.R.D. at 685); see also Dorado v. Bank of America, No. 16-
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`is a pending motion to dismiss.’”); Reilly v. Amy's Kitchen, Inc., No. 13-21525-CIV, 2013 WL
`3929709, at *1 (S.D. Fla. July 31, 2013) (“[T]here is no general rule that discovery be stayed while
`a pending motion to dismiss is resolved.”); Gannon v. Flood, No. 08-60059- CIV, 2008 WL
`793682, at *1 (S.D. Fla. Mar. 24, 2008) (Chudasama “does not indicate a broad rule that discovery
`should be deferred whenever there is a pending motion to dismiss.”); Bocciolone v. Solowsky, No.
`08-20200-CIV, 2008 WL 2906719, at *1 (S.D. Fla. July 24, 2008) (“[C]ourts have consistently
`rejected any per se requirement to stay discovery pending resolution of a dispositive motion.”).
`Instead, the Chudasama court “confronted a very specific situation involving a threefold problem
`— unjustifiable delay by the district court in ruling on the motion to dismiss, an erroneous decision
`to compel discovery from the defendant prior to adjudicating the motion to dismiss, and an
`especially dubious fraud claim that was likely to be dismissed.” Ray, 2012 WL 5471793, at *3.
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`5
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`21147-CIV-SCOLA, 2016 WL 10859786 * 1 (S.D. Fla. Jun 3, 2016) (“A request to stay all
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`discovery pending resolution of a motion is rarely appropriate unless resolution of the motion will
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`dispose of the entire case.”).
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`Here, it certainly cannot be said that Defendants’ pending motions to dismiss “will dispose
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`of the entire case,” particularly where Plaintiffs will seek this week to amend their Complaint to,
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`among other things, address purported deficiencies raised in the Motions, include additional parties
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`and claims, and provide additional context and background for the already-pled claims.
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`6
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`Case 1:22-cv-23753-KMM Document 197 Entered on FLSD Docket 05/10/2023 Page 7 of 8
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`Dated: May 10, 2023
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`Respectfully submitted,
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`CASE NO. 1:22-cv-23753-KMM
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`By: /s/ Adam Moskowitz
`Adam M. Moskowitz
`Florida Bar No. 984280
`Joseph M. Kaye
`Florida Bar No. 117520
`THE MOSKOWITZ LAW FIRM, PLLC
`3250 Mary Street, Suite 202
`Coconut Grove, FL 33133
`Telephone: (305) 740-1423
`adam@moskowitz-law.com
`joseph@moskowitz-law.com
`By: /s/ David Boies
`David Boies
`(Pro Hac Vice)
`Alex Boies
`(Pro Hac Vice)
`BOIES SCHILLER FLEXNER LLP
`333 Main Street
`Armonk, NY 10504
`Phone: (914) 749–8200
`dboies@bsfllp.com
`By: /s/ Stephen Neal Zack
`Stephen Neal Zack
`Florida Bar No. 145215
`BOIES SCHILLER FLEXNER LLP
`100 SE 2nd St., Suite 2800
`Miami, FL 33131
`Office: 305-539-8400
`szack@bsfllp.com
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`
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`By: /s/Jose M. Ferrer
`Jose Ferrer
`Florida Bar No. 173746
`Michelle Genet Bernstein
`Florida Bar No. 1030736
`MARK MIGDAL HAYDEN LLP
`8 SW 8th Street, Suite 1999
`Miami, FL 33130
`Office: 305-374-0440
`jose@markmigdal.com
`michelle@markmigdal.com
`eservice@markmigdal.com
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`Co-Counsel for Plaintiff and the Class
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`CASE NO. 1:22-cv-23753-KMM
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the forgoing was filed on May 10, 2023, via
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`the Court’s CM/ECF system, which will send notification of such filing to all attorneys of record.
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` By: /s/ Adam M. Moskowitz__
` ADAM M. MOSKOWITZ
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