Case 1:22-cv-23753-KMM Document 198 Entered on FLSD Docket 05/11/2023 Page 1 of 11
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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’ MOTION FOR LEAVE TO AMEND COMPLAINT
`AND INCORPORATED MEMORANDUM OF LAW
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`Plaintiffs respectfully request the Court grant leave to amend their complaint, in the form
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`attached as Exhibit A. (“Am. Complaint”).
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`The proposed Amended Complaint: (1) includes crucial, new information regarding those
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`FTX Brand Ambassador Defendants,1 who argue in their pending Motions to Dismiss that this
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`Court has no jurisdiction over them for these claims and that these claims have no relationship to
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`Florida, ECF No. 139, (2) is the first one that Plaintiffs seek leave of Court to file; (3) is timely
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`(there is no Case Management Schedule with a governing deadline to seek leave to amend and/or
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`to complete discovery); (4) includes a new Plaintiff seeking to represent an alternative subclass for
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`the state of California; (5) includes an additional Defendant (TSM, the esports company that the
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`FTX Group entered into a $210 million partnership with); (6) incudes additional claims against all
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`FTX Brand Ambassador Defendants; and (7) includes significant substantive amendments to the
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`claims against the FTX Brand Ambassador Defendants to address arguments raised in their
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`1 Of the 12 current FTX Brand Ambassador Defendants, Brady, Bündchen, Curry, David, the
`Golden State Warriors, LLC (“GSW”), Haslem, Lawrence, Ohtani, O’Leary, O’Neal, Ortiz, and
`Osaka, five of them contest the Court’s personal jurisdiction: Defendants Curry, David, GSW,
`Ohtani, and Osaka (the “12(b)(2) Defendants”).
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`CASE NO. 1:22-cv-23753-KMM
`pending motions to dismiss, [ECF Nos. 154–159], clarify facts and bring to light developments
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`that have occurred since the last complaint was filed December 16, 2022.
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`One of the named FTX Defendants, Mr. Daniel Friedberg, former Chief Compliance
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`Officer of FTX.US and former Chief Regulatory Officer of FTX International, recently provided
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`a Declaration, under penalty of perjury, where he explains his involvement in this litigation and he
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`attests to specific arguments raised by the 12(b)(2) Defendants, namely that there is no connection
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`between Plaintiffs’ claims and the state of Florida. See Am. Complaint, Ex. A. Mr. Friedberg’s new
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`testimony is supported by a plethora of contemporaneous evidence (none of which was produced
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`by Defendants in this litigation), including a transcript from an in-depth podcast interview of Avi
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`Dabir, FTX’s former Vice President of Business Development, who was based in Miami, Florida,
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`and in charge of the FTX Brand Ambassador Agreements, including those of the 12(b)(2)
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`Defendants. See Am. Complaint, Ex. B. Based upon this new, extensive evidence, there appears to
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`be no state that has more connections to the FTX Brand Ambassador Defendants than the state
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`of Florida.
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`Plaintiffs requested that Defendants stipulate to Plaintiffs filing the Amended Complaint,
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`pursuant to Rule 15(a)(2), in that:
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`(3) the Amendment is timely, because there is no Case Management Order (and therefore
`no current deadline to seek leave amend);
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`(2) no discovery has been produced by any of the FTX Defendants, nor is there any
`deadline for completing discovery, so there is no way the Amendment could result in any
`“undue prejudice” to any of the Defendants;
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`(3) the Amendment cannot be “futile,” in that it specifically addresses the purported
`deficiencies raised in Defendants’ pending motions to dismiss, and is the first substantive
`amendment sought after any motions to dismiss were filed; and
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`(4) the Amendment includes additional claims and parties that Defendants and the Court
`have yet to address.
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`2
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`CASE NO. 1:22-cv-23753-KMM
`With no “substantial reason” to deny amendment at this early stage, this Court has
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`previously held that such amendment should be liberally permitted. See Bonilla v. Librati, Case
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`No. 1:21-cv-21588-KMM, 2022 WL 4594126, at *2 (S.D. Fla. Feb. 26, 2022).
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`I.
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`FACTUAL BACKGROUND
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`On November 15, 2022, Plaintiff, Garrison filed this original class action lawsuit (the
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`“Garrison Lawsuit”). The lawsuit seeks damages relating to the offer and sale of the FTX Trading’s
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`and FTX US’s yield-bearing cryptocurrency accounts. [ECF No. 1]. The initial complaint was filed
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`two business days after FTX collapsed and sought bankruptcy protection on November 11, 2022.
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`On December 16, 2022, Plaintiffs complied with the Court’s Order, and filed an Amended
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`Complaint (the “First Amended Complaint”) [ECF No. 16] which consolidated this action, with
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`the “Podalsky Lawsuit – which the Court found “ha[d] common questions of fact” and therefore
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`that “consolidation [was] appropriate.” [Case No. 1:22-cv-23983-KMM, ECF No. 7].2
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`On April 14, 2023, Defendants filed motions to dismiss the First Amended Complaint:
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`1. the 12(b)(2) Defendants moved to dismiss the First Amended Complaint, arguing this
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`Court lacks specific personal jurisdiction over them for these claims, which they argue
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`have no connection to the State of Florida [ECF No. 139];
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`2. the FTX Brand Ambassador Defendants moved to dismiss for failure to state a claim
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`[ECF No. 154]; Defendant Haslem moved to dismiss for insufficient service [ECF No.
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`156];
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`3. Defendant Ohtani filed a supplemental memorandum of law in support of his motion
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`to dismiss, asserting personal jurisdiction arguments [ECF No. 157];
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`4. Defendant Lawrence moved to dismiss pursuant to FRCP 12(b)(6) [ECF No. 158]; and,
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`2 Plaintiffs complied with the Court’s requirement on font size and spacing, which also greatly
`increased the number of pages from the original Complaint.
`3
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`5. Defendant GSW filed an individual brief in support of the FTX Brand Ambassador
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`Defendants’ motion to dismiss and to transfer venue in the alternative.
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`On April 16, 2023, Plaintiffs served Defendant, Shaquille O’Neal [ECF Nos. 101, 161].
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`On May 8, 2023, the Parties filed a Joint Scheduling Report [ECF No 192] where Plaintiffs
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`state their intention to file this Amended Complaint, and Defendants state their opposition. No
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`Scheduling Conference with the Court has occurred, nor has a Scheduling Order been entered.
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`On April 26, 2023, the Non-FTX Defendants moved to stay discovery (including Initial
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`Disclosures) pending the Court’s rulings on the Motions to Dismiss [ECF No. 162]; and Plaintiffs,
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`pursuant to Local Rule 7.1(d)(2), moved on an expedited basis to take brief jurisdictional discovery
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`from the 12(b)(2) Defendants prior to a ruling on their jurisdictional arguments, and a brief
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`opportunity to prepare an amended complaint following that discovery to address their arguments
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`and declarations [ECF No. 163]. On May 10, 2023, Defendants filed their responses to Plaintiffs’
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`motion for jurisdictional discovery. ECF Nos. 195, 196. In their responses, Defendants state their
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`position that “Plaintiffs should not be allowed to amend their complaint at all with respect to
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`personal jurisdiction (or otherwise),” and that “no amendment should be allowed, if at all,
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`until the Court rules on the Motions to Dismiss” what would become the superseded complaint
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`should Plaintiffs be granted leave to amend. ECF No. 195 at 19–20; ECF No. 196 at 2.
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`Plaintiffs provided Defendants with the proposed Amended Complaint, who informed
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`Plaintiffs that they are not prepared “at this time” to stipulate to its filing. Mindful of the fact that
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`this Court disfavors last-minute requests (the deadline for Plaintiffs to oppose the pending motions
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`to dismiss is Monday, May 15, 2023, which would be rendered moot if leave to amend is granted),
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`this Motion followed, and Plaintiffs hope all Defendants will agree by Monday to an agreed
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`Stipulation.
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`4
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`CASE NO. 1:22-cv-23753-KMM
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`II.
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`LEGAL DISCUSSION
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`A. Legal Standard
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`“Rule 15(a) of the Federal Rules provides that ‘[a] party may amend its pleading once as a
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`matter or course within . . . 21 days after service of a motion under Rule 12(b), (e), or (f).’” Bonilla
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`v. Librati, Case No. 1:21-cv-21588-KMM, 2022 WL 4594126, at *2 (S.D. Fla. Feb. 26, 2022)
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`(quoting Fed. R. Civ. P. 15(a)(1)(B)). Beyond that, “a party may amend its pleading only with the
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`opposing party’s written consent or the court’s leave” and “[t]he court should freely give leave
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`when justice so requires.” Bonilla, 2022 WL 4594126, at *2 (quoting Fed. R. Civ. P. 15(a)(2)).
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`Although “[t]he decision whether to grant leave to amend is committed to the sound
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`discretion of the trial court,” “‘[u]nless there is a substantial reason to deny leave to amend, the
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`discretion of the district court is not broad enough to permit denial.’” Bonilla, 2022 WL 4594126,
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`at *2 (citing Best Canvas Prods. & Supplies, Inc. v. Ploof Truck Lines, Inc., 713 F.2d 618, 622 (11th
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`Cir. 1983); quoting Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir 1981)); see also
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`Castros v. Signal Finance Co. LLC, 2018 WL 1137099 (S.D. Fla. Feb. 4, 2018) (Moore, C.J.)
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`(citation omitted); SkyHop Techs., Inc. v. Narra, 21-60799-CIV, 2021 WL 4990666, at *2 (S.D.
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`Fla. Aug. 3, 2021) ("[T]he Eleventh Circuit has stressed that ‘unless there is a substantial reason
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`to deny leave to amend, the discretion of the district court is not broad enough to permit denial.’”)
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`(quoting Thomas v. Town of Davie, 847 F.2d 771, 773 (11th Cir. 1988)).
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` “A substantial reason could include “undue delay, bad faith or dilatory motive, repeated
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`failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing
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`party, and futility of the amendment.” Castros, 2018 WL 1137099, at *1 (quoting Grayson v. Kmart
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`Corp., 79 F.3d 1086, 1110 (11th Cir. 1996)).
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`5
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`B. There is No Substantial Reason to Deny Leave to Amend
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`Plaintiffs filed the initial complaint only days after the FTX Entities filed for bankruptcy
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`protection. Plaintiffs subsequently amended their complaint a few weeks later, to comply with the
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`Court’s Order, to consolidate two separate lawsuits into an amended complaint. Since then,
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`Plaintiffs have learned many more important facts and details concerning the specific question of
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`personal jurisdiction, FTX implosion and Defendants’ involvement and liability.
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`For example, Plaintiffs just learned that FTX’s Vice President of Business Development,
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`Mr. Avinash Dabir, who was charged with creating, consummating, and implementing the
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`partnership agreements between FTX and the Defendants, began operating from FTX’s physical
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`offices in Miami, Florida early in 2021. Plaintiffs will supplement their jurisdictional allegations
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`with this crucial information – as substantiated through Defendant Friedberg’s Sworn Declaration.
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`See Am. Complaint, Ex. A. These allegations obviate many of the existing jurisdictional challenges
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`Defendants raise in their current motions to dismiss, including the erroneous argument that “no
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`conspiracy could have been ‘engineered in Florida’ because FTX did not even plan to move to
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`Miami until late September 2022 – after entering the alleged business agreements with the [Non-
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`FTX] Defendants.” [ECF No. 139, at p. 10].
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`Thus, Plaintiffs respectfully seek leave to now amend their complaint, in order to reflect
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`these and other new, crucial facts they have learned after filing their original complaint and new
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`events which impact the dispute between the parties. Plaintiffs address many of the purported
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`pleading and jurisdictional deficiencies that Defendants identify in their pending motions to
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`dismiss. “Courts routinely allow such amendments to cure pleading deficiencies in service of the
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`general principle that “decisions on the merits are not to be avoided on the basis of ‘mere
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`technicalities.’” Castros, 2018 WL 1137099, at *1 (quoting Schiavone v. Fortune, 477 U.S. 21, 27
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`(1986)); see also AT&T Mobility, LLC v. Digital Antenna, Inc, No. 09-60639-CIV, 2010 WL
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`6
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`3608247, at *3 (S.D. Fla. Sept. 9, 2010) (“Courts liberally allow amendments or supplements
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`because ordinarily they are efficient mechanisms to refine the pleadings to reflect the facts that
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`diligent parties learn during discovery or to address new events which impact the dispute between
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`the parties and that can be efficiently resolve din the course of the litigation.”); see also Crossroads
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`Financial, LLC v. Alma-Mater Collection, Inc., No. 15-81095-CIV-MARRA, 2019 WL 13196474
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`(S.D. Fla. Dec. 18, 2019) (Marra, J.) (reversing on reconsideration the court’s prior order denying
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`belated motion for leave to file second amended counterclaim, filed over 3 years after the deadline
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`to amend in the scheduling order, explaining that “it would be in the interest of judicial economy
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`to grant the Motion for Leave to File Second Amended Counterclaim, rather than ruling on the
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`Motion to Dismiss Amended Counterclaim, and if granted, allow leave to amend (DE 129). This
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`is especially appropriate where, as here, [counter-plaintiff] has conceded the Amended
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`Counterclaim has multiple ‘technical pleading issues’ that have subsequently been addressed in
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`the proposed Second Amended Counterclaim”).
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`This Motion for leave is timely, especially because the Court has yet to enter a Scheduling
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`Order in this case, meaning the Rule 16(b) inquiry does not apply,3 and none of the Defendants
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`have filed any responsive pleadings. See ABS Healthcare Services, LLC v. Maxim Health Inc., 20-
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`CV-61456, 2021 WL 9347051, at *3 (S.D. Fla. Aug. 23, 2021) (granting leave to amend where
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`plaintiffs’ motion to amend was timely filed, it was the first proposed amendment, jurisdictional
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`discovery was incomplete, and there was no evidence of delay, bad faith, dilatory motive, or
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`repeated failure to cure deficiencies by Plaintiffs).
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`3 As Rule 16(b) does not apply here because Plaintiffs’ motion is timely, Plaintiffs are not required
`to first demonstrate good cause before seeking leave under the liberal standard set forth in Rule
`15(a)(2)—though good cause certainly exists here in light of the circumstances. See Bonilla v.
`Librati, 2022 WL 4594126, at *2 (S.D. Fla. Feb. 26, 2022) (Moore, C.J.) (“The Court must first
`determine whether the instant Motion for Leave to File Second Amended Counterclaim . . . is
`timely filed pursuant to the Courts scheduling order, as this determines whether [movants] must
`first demonstrate good cause under Rule 16(b)”).
`7
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`CASE NO. 1:22-cv-23753-KMM
`Any potential arguments Defendants may raise regarding the futility of the proposed
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`amended complaint are more appropriately addressed in a renewed motion to dismiss the amended
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`complaint. Bonilla v. Librati. See 2022 WL 4594126, at *4 (holding that arguments challenging
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`leave to amend based on the futility of the proposed amended complaint would more appropriately
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`be addressed upon adjudication of a renewed motion to dismiss the amended complaint); see also
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`Montes v. M & M Mgmt. Co., 15-80142-CIV, 2015 WL 11254703, at *1 (S.D. Fla. May 12, 2015)
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`(“[L]eave to amend should not be denied on the ground of futility unless the proposed amendment
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`is clearly insufficient or frivolous on its face.”).
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`Notably, discovery has not even begun, precluding any argument that the proposed
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`amendment would result in any additional or expanded discovery, such that allowing Plaintiffs to
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`amend their complaint will not delay resolution of this case or prejudice any party. Courts deem
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`amendments prejudicial when:
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`the opponent would be required to engage in significant new preparation at a late
`stage of the proceedings, the defendant would be put to added expense and the
`burden of a more complicated and lengthy trial, or if the issues raised by the
`amendment are remote from the other issues in the case and might confuse or
`mislead the jury. The fact that the amendment might increase the defendant’s
`potential liability is generally not a sufficient reason to deny leave to amend.
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`Bonilla v. Librati, 1:21-CV-21588-KMM, 2022 WL 4594126, at *4 (S.D. Fla. Feb. 26, 2022)
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`(Moore, C.J.) (quoting Dannebrog Rederi AS v. M/Y True Dream, 146 F. Supp. 2d 1307, 1315 (S.D.
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`Fla. 2001).
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`III.
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`CONCLUSION
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`For the reasons set forth above, Plaintiffs very respectfully request that the Court grant
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`Plaintiffs leave to file their proposed Amended Complaint by Monday’s deadline, attached hereto
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`as Exhibit A.
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`S.D. FLA. L.R. 7.1 CERTIFICATION
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`Plaintiffs’ Counsel certify that they have conferred with Defendants’ Counsel over the past
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`two weeks, in a good faith effort to resolve the issues raised in this Motion, and report that
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`Defendants “at this time,” oppose the requested relief of agreeing to a Stipulation for the proposed
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`Amendment, asserting that “Plaintiffs should not be allowed to amend their complaint at all with
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`respect to personal jurisdiction (or otherwise),” and that “no amendment should be allowed, if at
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`all, until the Court rules on the Motions to Dismiss” what would become the superseded complaint
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`should Plaintiffs be granted leave to amend. ECF No. 195 at 19–20; ECF No. 196 at 2. Plaintiffs
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`intend to continue discussing these specific issues with all Defendants.
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`Case 1:22-cv-23753-KMM Document 198 Entered on FLSD Docket 05/11/2023 Page 10 of 11
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`Dated: May 11, 2023
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`CASE NO. 1:22-cv-23753-KMM
`Respectfully submitted,
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`By: /s/ Adam Moskowitz
`Adam M. Moskowitz
`Florida Bar No. 984280
`adam@moskowitz-law.com
`Joseph M. Kaye
`Florida Bar No. 117520
`joseph@moskowitz-law.com
`THE MOSKOWITZ LAW FIRM, PLLC
`3250 Mary Street, Suite 202
`Coconut Grove, FL 33133
`Telephone: (305) 740-1423
`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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`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
`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the forgoing was filed on May 11, 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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`11
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